Brokerage houses say the current valuation of JSW Infrastructure issue seems to be a reasonable considering the company's strong revenue prospects
MUMBAI, Sep 26 (The CONNECT) - The Rs 2800 Crore Initial Public Offering of JSW Infrastructure, subscribed 2.13 times on the second day of bidding.
The company is the ports business of US$ 23 billion JSW Group and India’s second largest commercial port operator in terms of cargo handling capacity.
The issue received bids of 29,07,83,556 shares against the offered 13,62,83,186 equity shares, at a price band of ₹113-119, according to the data available on the stock exchanges.
Non-Institutional Investors was subscribed 3.70 times, Retail Portion was subscribed 4.54 times, whereas Qualified Institutional Buyer Portion was subscribed 0.55 times. The issue kicked off for subscription on Monday, September 25th 2023 and will close tomorrow.
JSW Infrastructure Ltd had raised Rs 1,260 crore from anchor investors. Foreign Investors and Domestic Institutions who participated in the anchor were Morgan Stanely, HSBC Global, Theleme, Pictet, SBI MF, ICICI Pru MF, HDFC MF, Nippon MF, Birla MF, UTI MF, LIC MF, Franklin Templeton MF, Tata MF, Sundaram MF, SBI Life, Birla Life, Bajaj Allianz Life, Max Life, SBI General Insurance, Shamyak Investment (Enam group firm led by Akash Bhansali), Premji Investment, Madhu Kela led MK Ventures, Sunil Singhania led Abakkus etc.
The issue has received a "SUBSCRIBE" rating from brokerage firms like Asit. C. Mehta Investment Intermediates Ltd, Marwadi Share & Finance Ltd, Ventura Securities Ltd, Canara Bank Securities Ltd, Geojit Securities Ltd, among others. The concessions for ports and terminals managed by JSWIL provide a robust revenue outlook, boasting a residual weighted average lifespan of 25 years. The cargo composition predominantly comprises bulk and break-bulk commodities such as thermal and coking coal, as well as iron ore.
According to the brokerage houses, the current valuation of this issue stands at a price-to-earnings ratio of 28.88x, which seems to be a reasonable price considering the company's strong revenue prospects and consistent profit margins in the future.
JM Financial Limited, Axis Capital Limited, Credit Suisse Securities (India) Private Limited, DAM Capital Advisors Limited, HSBC Securities and Capital Markets (India) Private Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.