JSW Infra IPO sails through on second day of bidding; retail portion booked 2.85x

The Rs IPO of JSW Infrastructure saw a strong response during the second day of the bidding process. The issue was mostly subscribed by retail and non-institutional investors. The issue opened for subscription for bidding on Monday, September 25, ended the first day of bidding with 46 per cent subscription. JSW Infrastructure is selling its shares in the range of Rs 113-119 per equity shares and with a lot size of 126 equity shares and its multiples thereafter. The issue is entirely a sale of fresh issue of about 23.53 crore equity shares and the company is looking to raise Rs 2,800 crore via IPO route. According to the data, the investors made bids for 12,49,26,354 equity shares, or 92 per cent, compared to the 13,62,83,186 equity shares offered for the subscription by 12.45 pm on Tuesday, September 26. The bidding for the issue will conclude on Wednesday, September 27. An IPO, which is booked 90 per cent or more is said to be 'sail-through' or can be considered successful. This means that a minimum of 90 per cent bidding is required for the success of an IPO. The allocation for retail investors was booked at 2.85 times, while the portion for non-institutional investors saw a subscription of 1.40 times. However, the portion reserved for qualified institutional bidders (QIBs) attracted only three per cent bids at the same time. JSW Group's JSW Infra provides maritime-related services, such as logistics services, cargo handling and storage solutions. The Sajjan Jindal-led company develops and operates ports and port terminals under port concessions. JSW Infra was the second largest commercial port operator in the country in terms of cargo handling capacity for FY 22. Jm Financial, HSBC Securities & Capital Markets, ICICI Securities, Axis Capital, Dam Capital Advisors, Credit Suisse Securities (India), Kotak Mahindra Capital Company and SBI Capital Markets are the lead managers to the issue. Kfin Technologies is the registrar for the IPO. JSW Infra raised Rs 1,260 crore from 65 anchor investors and issued 10,58,82,352 shares at a price of Rs 119 per share. Majority of the brokerage firms, tracking the issue of JSW Infra, are positive on it. "We recommend to subscribe to the issue as a good long-term investment given the strong group profile, improving capacity utilisations, saving in interest costs and the possibility of doubling capacities which can result in very handsome long-term growth," said SMIFS. At an upper price band, the IPO is valued at EV/EBITDA of 19.9 times which at a 9 per cent premium to its peer (Adani ports), however higher ROE and lower leverage ratio to its peers are the positives that makes the IPO an attractive proposition. The company with the proceeds is going to expand its capacity in LPG terminal and container business, said Indsec Research. "JSW Infra group customers, JSW steel is going to take its steelmaking capacity to 50 MT and JSW energy is also going to increase the power capacity this will help JSW Infrastructure going forward. The company plans to expand its brownfield capacity and is going to make green field investment," it added with a 'subscribe' rating for the IPO.Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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