JSW Infrastructure aims to raise $336 million from initial public offering amid India's market boom

JSW Infrastructure aims to raise $336 million from initial public offering amid India's market boom
India's second-largest commercial port operator, JSW Infrastructure, is seeking to raise up to 28 billion Indian rupees ($336 million) from an initial public offering, with the sale of shares. The company, owned by industrialist Sajjan Jindal, has set the price range of 113 rupees to 119 rupees each, it said. The offer closes on September and the company will list on October 6 on the Bombay Stock Exchange and National Stock Exchange of India.
JSW Infrastructure is involved in offering maritime-related services such as cargo handling, storage solutions and logistics services. Its operations have expanded from one port concession in Goa, which was acquired by the JSW Group in 2002 and began operations in 2004, to nine across the Indian states of Maharashtra, Karnataka, Odisha and Tamil Nadu as of the end of last year.
The company also operates two port terminals in Fujairah and Dibba in the UAE. The proceeds from the listing will be used in part to repay the debts of its subsidiaries, JSW Dharamtar Port Private and JSW Jaigarh Port. It will also be used to expand and upgrade Jaigarh Port and Mangalore Container Terminal, as well as for general corporate purposes, the company said. While the listing does not materially change the India-based port operator’s credit profile, it will improve the company’s access to capital and funding sources, rating agency Fitch said this month.
"The company plans to use about 8.8 billion rupees of its net proceeds to reduce debt, which is positive to its already robust financial profile. "Even so, JSWIL’s rating remains constrained by high exposure to specific commodities and customer concentration risk. Coal and iron ore make up about 85 percent of JSWIL’s cargo volume, while JSW Steel contributes more than 50 percent of cargo volumes".
Indian stock exchanges, including BSE and NSE as well as SMEs (small and medium enterprises), ranked first in the world in terms of the number of IPOs this year as of August, consultancy EY said in a report last month. The main markets, comprising BSE and NSE, recorded 10 IPOs in the first half of this year, including a fund raise by an infrastructure investment trust, it said.
In the SME markets, there were 70 listings in the January to June period. The most active sectors in recent listings include hospitality and construction, automotive and transportation, diversified industrial products and real estate. The report also indicated a positive outlook for IPO activity in India, with around 13 companies filing their draft red herring prospectus in the second quarter.