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BACKGROUND

Incorporated in 2006, JSW Infrastructure Limited provides maritime-related services including cargo handling, storage solutions and logistics services. The company develops and operates ports and port terminals under Port Concessions. JSW Infrastructure Limited is a part of the JSW Group.

Objects and Details of the Issue:

* Total issue of ~Rs.2800 Cr (at upper price band) consists of fresh issue only.

* The Company proposes to utilise the Net Proceeds from the Fresh Issue towards:

1) Prepayment or repayment, in full or part, of all or a portion of certain outstanding borrowings through investment in WOS’s, JSW Dharamtar Port Private Limited and JSW Jaigarh Port Limited;

2) Financing capital expenditure requirements through investment in WOS JSW Jaigarh Port Limited, for proposed expansion works i.e.,

i) Expansion of LPG terminal (“LPG Terminal Project”);

ii) Setting up an electric sub-station; and

iii) Purchase and installation of dredger;

3) Financing capital expenditure requirements through investment in WOS,JSW Mangalore Container Terminal Private for proposed expansion at Mangalore Container Terminal. 

Investment Rationale:

* Overall traffic at Indian ports to grow at 3-6% CAGR (FY24-FY28)

* Well-equipped ports and terminals with multi-modal evacuation channels

* Inorganic growth opportunities

* Increasing third-party customer base

* Predictable revenues driven by long-term concession periods

Valuation and Recommendation:-

JSW Infrastructure Ltd is the fastest growing port-related infrastructure company. It has a diversified customer base to include third-party customers across geographies by leveraging locational advantage and maximizing asset. Hence it is able to generate higher EBITDA margins and ROCE compared to Adani Ports. It intends to leverage its presence in the non-major ports to provide fully integrated logistics solutions to its customers. JSW Infrastructure Ltd is being offered at reasonable valuations at 17.2x FY23 EBITDA and thus we recommend subscribing to the issue

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SEBI Registration number is INH000001766