JSW Infrastructure IPO booked 8.5 times on final day, retail portion subscribed 7.5 times
The initial public offering (IPO) of JSW Infrastructure, a part of the JSW Group, witnessed strong demand from investors and was subscribed 8.5 times on the final day of bidding, September 27. Bids were received for 1.15 crore equity shares against the total issue size of 13.62 crore shares.
Retail investors, who had a 10 percent reservation in the IPO, subscribed 7.5 times their allotted quota. High net worth individuals (HNIs), with a 15 percent reservation, oversubscribed their portion by 10 times.
Qualified institutional buyers (QIBs), who typically have a medium-to-long-term investment horizon, bid 8.13 times their reserved portion, which is 75 percent of the total issue size. This strong response from all investor categories reflects the market’s positive sentiment toward the JSW Infrastructure IPO.
The qualified institutional buyer (QIB) quota for the JSW Infrastructure IPO was reduced after anchor investors purchased Rs 1,260 crore worth of shares, constituting 60 percent of the total QIB book, on September 22. Several prominent investors, including HSBC, Morgan Stanley, ICICI Prudential Mutual Fund, Government of Singapore, LIC Mutual Fund, SBI Mutual Fund, Fullerton, The Master Trust Bank of Japan, Monetary Authority of Singapore, Goldman Sachs, Sunil Singhania-owned Abakkus, and HDFC Mutual Fund, participated in the anchor book.
JSW Infrastructure aims to raise Rs 2,800 crore through its public issue, which had subscribed 2.13 times in the first two days of bidding on September 25 and 26. The price band for the IPO is set at Rs 113-119 per share, and the offering consists entirely of a fresh issue component, with the entire proceeds (excluding IPO expenses) going to the company for its maritime-related services business.
JSW Infrastructure, India’s second-largest commercial port operator, plans to reduce its debt burden by Rs 880 crore using the funds raised from the fresh issue of shares. As of the end of June 2023, the company had total outstanding borrowings of Rs 4,228.4 crore on a consolidated basis.
A significant portion of the funds, Rs 1,029.04 crore, will be allocated for expansion or upgrade works at Jaigarh Port, which is owned by the subsidiary JSW Jaigarh Port. Additionally, Rs 151.05 crore will be utilized for the Mangalore Container Terminal, owned by the subsidiary JSW Mangalore Container Terminal.
The remaining funds will be used for general corporate purposes, providing flexibility for the company’s ongoing operations and growth initiatives.
JSW Infrastructure has demonstrated impressive financial growth, achieving a 62.3-percent CAGR growth in net profit and a 41-percent CAGR growth in revenue from operations during the period between FY21 and FY23. The company is part of the JSW Group and benefits from strategically located assets in proximity to JSW Group customers and industrial clusters, supported by multi-modal evacuation infrastructure.
With a strong track record and expansion efforts, JSW Infrastructure has grown from one Port Concession in Goa in 2002 to nine Port Concessions across India as of June 2023, establishing itself as a diversified maritime ports company. The company’s installed cargo handling capacity in India has also increased, growing at a CAGR of 15.27 percent from 119.23 million metric tons per annum (MTPA) in March 2021 to 158.43 MTPA in March 2023. The company’s growth and market potential have garnered significant investor interest in its IPO.
JSW Infrastructure’s IPO is progressing according to its schedule, with the basis of allotment set to be finalized by October 3. Eligible investors can expect the equity shares to be credited to their demat accounts by October 5. Trading in the company’s equity shares is scheduled to commence on October 6.
This IPO marks the first listing from the JSW Group since 2010 when it listed its energy business separately. It will be interesting to see whether JSW Infrastructure adopts the new T+3 timeline for listing shares voluntarily or continues with the old T+6 timeline. Since September 1, 2023, companies launching IPOs have the option to voluntarily list shares in the T+3 timeline, while it will become mandatory for all companies launching IPOs with effect from December 1, 2023.
According to analysts, JSW Infrastructure shares were trading at around a 15-percent premium over the upper price band in the grey market, an unofficial platform for trading in IPO shares until the official listing date.