Indian ports operator JSW Infrastructure shares jump 30% in debut

Shares in Indian port operator JSW Infrastructure jumped more than 30 per cent on their market debut, valuing the company at more than $3.97bn in one of India’s largest listings this year.

JSW Infrastructure is taking on rival Gautam Adani’s company Adani Ports, India’s largest commercial ports operator, as it seeks to expand its business by capitalising on New Delhi’s infrastructure privatisation drive.

The ports company raised Rs28bn ($337mn) through the first initial public offering in a decade for JSW Group, the steel and infrastructure conglomerate. Shares on Tuesday morning climbed to Rs157.30, a more than 30 per cent gain on the offer price.

Arun Maheshwari, JSW Infrastructure chief executive and joint managing director, said New Delhi’s port privatisation push represents an opportunity for the company. In December 2022, India’s ministry of ports, shipping and waterways said it had a pipeline of 81 public-private partnerships to be awarded before March 2025.

With the government managing “50 per cent of the port capacity today, the kind of pipeline of opportunity which is coming up is unimaginable”, said Maheshwari.

“Our company would be debt free post IPO, so we have enough headroom and war chest ready to encash these opportunities,” he added.

Most of JSW Infrastructure’s assets are terminals operated under government-awarded concessions within large ports, but the company also builds and runs some independent ports.

JSW Infrastructure and Adani Ports recently expressed interest to construct a port in the southern state of Karnataka, with JSW Infrastructure bidding for the project. “We stand a fair chance to take the award,” said Maheshwari.

Along with paying down its debt pile, JSW Infra intends to use the IPO proceeds to expand its existing ports, including a liquefied petroleum gas terminal at its Maharashtra port, and it wants to diversify its client base.

JSW Infrastructure began as a logistics arm for the Jindal family’s business empire in 2004. The conglomerate’s heavy industries account for about 60 per cent of JSW Infrastructure’s work, which is mostly iron ore and coal shipments.

The JSW Infrastructure IPO is one of India’s largest listings this year. India’s biggest condom maker Mankind Pharma raised $529mn in April, while Cube Highways Trust, a road fund, and Nexus Select Trust, a property fund, raised $638mn and $389mn, respectively, according to Dealogic data.

The IPO comes as India turns to private companies to upgrade its congested transport infrastructure.

While half of India’s port capacity is still run by the central government, Adani Ports controls 24 per cent of India’s port cargo handling and JSW Infrastructure accounts for 6 per cent, according to company estimates.

Other commercial port operators include Dubai-based DP World, but they are mainly regional and far smaller than Adani and JSW Infrastructure.

Maheshwari said that “pan-India there are very few players in this sector, largely because it is a very capital-intensive sector, entry barriers are very high”.

Still, he said that there was room for competition. “The pie in India is so big, it is [such an] underserved economy.”