Admin
11 November 2023

JSW Infrastructure IPO: Navigating Growth in India's Maritime Landscape

Introduction:

JSW Infrastructure IPO, a fresh issue of Rs 2,800.00 crores, consisting of 23.53 crore shares, attracted investors with its promising debut in the market. The bidding phase spanned from September 25, 2023, to September 27, 2023. The allotment was finalized on September 28, 2023, and the shares were listed on BSE and NSE on October 3, 2023. Priced at ₹113 to ₹119 per share, the minimum lot size was set at 126 shares, requiring a minimum investment of ₹14,994 for retail investors.

Key Stakeholders:

The IPO was shepherded by prominent entities, including Jm Financial Limited, Axis Capital Limited, Credit Suisse Securities (India) Private Limited, Dam Capital Advisors Ltd, Hsbc Securities & Capital Markets Pvt Ltd, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited, serving as the book running lead managers. Kfin Technologies Limited undertook the role of the registrar.

Market Performance:

As of November 9, 2023, JSW Infrastructure Limited's stock traded at ₹199.40, exhibiting a decline of 1.46%. The stock opened at ₹202.50, reaching a daily high of ₹206.50, and a low of ₹198.20. The previous closing price stood at ₹202.35, with a total traded value of 59,98,279 shares. Notably, the 52-week high and low were recorded at ₹186.35 and ₹142.20, respectively.

IPO Details:

The IPO was open for subscription from September 25, 2023, to September 27, 2023, with listing occurring on October 3, 2023. Priced in the band of ₹113 to ₹119 per share, the issue comprised 235,294,118 shares, aggregating up to ₹2,800.00 Cr. All shares issued were part of a fresh issue. The face value of each share was ₹2.

Ownership Structure:

Prior to the issue, JSW Infrastructure had a pre-issue shareholding of 1,864,707,450 shares, and post-issue, this adjusted to 2,100,001,568 shares.

IPO Reservation:

The IPO offered 235,294,117 shares, with anchor investors subscribing to 45.00% of the shares. Qualified Institutional Buyers (QIBs) were offered 30.00%, Non-Institutional Investors (NIIs) received 15.00%, and Retail Individual Investors (RIIs) were allocated 10.00%. Anchor investors had a lock-in period of 30 days for 50% of shares and 90 days for the remaining.

Subscription Breakdown:

JSW Infrastructure IPO demonstrated a robust subscription status. As of September 27, 2023, the overall subscription rate was 39.36 times. Notably, the QIB category was oversubscribed at 60.12 times, NII at 16.83 times, bNII (bids above ₹10L) at 17.94 times, and sNII (bids below ₹10L) at 14.62 times. The retail category exhibited a healthy subscription rate of 10.87 times.

Financial Highlights:

As of March 31, 2023, JSW Infrastructure reported total assets of ₹9,450.66 crores, revenue of ₹3,372.85 crores, and a net profit of ₹749.51 crores. The net worth of the company stood at ₹3,934.64 crores, with reserves and surplus of ₹3,645.75 crores. The total borrowing was reported at ₹4,243.70 crores.

Key Metrics:

JSW Infrastructure IPO presented a Price-to-Earnings (P/E) ratio of 29.67, Post P/E of 19.38, and a Market Capitalization of ₹24,990 crores. Return on Equity (ROE) was at 18.33%, Return on Capital Employed (ROCE) at 19.49%, Earnings per Share (EPS) at ₹4.12, and Return on Net Worth (RoNW) at 18.80%.

IPO's Objectives:

The net proceeds from the IPO were earmarked for the following purposes:

1. Prepayment or repayment of outstanding borrowings.
2. Financing capital expenditure for the proposed expansion/upgradation works at Jaigarh Port.
3. Financing capital expenditure for the proposed expansion at Mangalore Container Terminal.
4. General corporate purposes.

Expert Analysis:

JSW Infrastructure, as part of the JSW group, marks its IPO after a hiatus of more than 13 years. With steady growth in both top and bottom lines for the reported periods, the issue, based on annualized FY24 earnings, appears reasonably priced. Investors are encouraged to consider this IPO for medium to long-term investment.

Conclusion:

JSW Infrastructure IPO presents an intriguing opportunity for investors to participate in the growth of India's maritime sector. The oversubscription across categories reflects the market's confidence in the company's prospects. As always, investors are advised to conduct thorough research and consider their risk tolerance before making investment decisions.

Read More IPO related blogs - Saakshi Medtech and Panels IPO