The JSW Infrastructure IPO has garnered substantial attention since its launch for subscription on Monday, making it the most prominent public offering this month. With a closing date set for September 27, individuals have the opportunity to place bids for the IPO.
This offering, characterized by a price band ranging from Rs 113 to Rs 119 per equity share, has already exhibited robust demand, having secured Rs 1,260 crore in funding. Notably, this impressive response includes enthusiastic participation from anchor investors such as Morgan Stanley, Goldman Sachs, Abakkus Investment, SBI Mutual Fund, and the Government of Singapore.
The allocation of shares in the JSW Infrastructure Limited IPO follows a structured distribution: a minimum of 75 percent is earmarked for Qualified Institutional Buyers (QIBs), up to 15 percent for Non-Institutional Investors (NIIs), and a maximum of 10 percent for Retail Investors. It's important to emphasize that this IPO exclusively involves a fresh issuance of shares amounting to Rs 2,800 crore and does not incorporate an Offer for Sale (OFS) component.
As articulated in the Red Herring Prospectus (RHP), the company intends to utilize the net proceeds from the IPO for specific purposes. This includes the prepayment or repayment of certain outstanding borrowings, primarily within its fully owned subsidiaries, namely JSW Dharamtar Port Private Limited and JSW Jaigarh Port Ltd. These funds will also support essential capital expenditure requirements, including the expansion and enhancement of Jaigarh Port, the expansion of an LPG terminal, and the acquisition and installation of a dredger.
The management of the JSW Infrastructure IPO is in the capable hands of esteemed financial institutions, including JM Financial Ltd, Axis Capital Ltd, Credit Suisse Securities (India) Private Ltd, DAM Capital Advisors Ltd, HSBC Securities and Capital Markets (India) Private Ltd, ICICI Securities Ltd, Kotak Mahindra Capital Company Ltd, and SBI Capital Market Ltd. Kevin Technologies Ltd is entrusted with the role of being the offer's registrar.
Prominent financial analysts have offered positive recommendations regarding subscription to the JSW Infrastructure IPO. Canara Bank Securities has highlighted the company's remarkable growth in installed cargo handling capacity and cargo volumes handled between Fiscal 2021 and Fiscal 2023, positioning it as the fastest-expanding port-related infrastructure company.
Choice Equity Broking has asserted that the IPO is reasonably priced, given the strong revenue visibility and consistent margins. Motilal Oswal Financial Services has expressed favor for the IPO, citing JSW Infrastructure's dominant position among Indian port operators, substantial cargo profile, and diversified geographical footprint.
Reliance Securities has emphasized the growth potential stemming from the "Make in India" and "China+1" themes, along with the steady expansion of cargo traffic.
Shivani Nyati, Head of Wealth at Swastika Investment Ltd., noted the robust financial performance of the business, with both sales and net worth on the rise. Nyati highlighted the favorable debt-to-equity ratio of 0.54 and the attractive valuation metrics of the IPO, with a P/E valuation of approximately 28x and an EV/EBITDA of 15.17, making it a compelling investment option.
In the grey market, the JSW Infrastructure IPO commands a premium (GMP) of +18, reflecting significant demand and investor interest, translating to shares trading at a premium of Rs 18 in the grey market.
Considering the upper end of the IPO price band and the current GMP, it is estimated that JSW Infra shares may list at Rs 137 apiece, representing a 15.13 percent increase from the IPO price of Rs 119.
The basis of allotment for the IPO is anticipated to be finalized on October 3, following which the company's shares will commence trading on the BSE and NSE on October 6.
