JSW Infrastructure Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India (Sebi) to raise around Rs 2,800 crore in an initial public offering. The whole IPO will be a purely new issue.

Of the gross proceeds, the public issue of Rs 880 crore will be used to invest in its subsidiaries JSW Dharamtar Port Pvt Ltd and JSW Jaigarh Port Ltd to repay debt. JSW Port of Dalanta has a total debt of Rs 4,303.9 crore as of December 2022.

The company will use part of the proceeds to invest in its subsidiary, JSW Jaigarh Port Ltd, to fund its capital expenditure needs for proposed expansion and upgrades. Rs 868.03 crore will be used for the LPG receiving terminal project, Rs 59.40 crore will be used for the construction of substations, and Rs 102.58 crore will be used for the purchase and installation of dredgers.

The company will also use Rs 151.63 crore to invest in its subsidiary JSW Mangalore Container Terminal Pvt Ltd for its capex needs.

JM Financial, Axis Capital, Credit Suisse, Dam Capital Advisors, HSBC, ICICI Securities, Kotak Mahindra Capital and SBI Capital Markets are the lead managers for the offering.

JSW Infrastructure provides its clients maritime services such as cargo handling, storage solutions, logistics services and other value-added services. The company is developing towards becoming a comprehensive logistics solution provider. It creates and manages ports and port terminals under port concession agreements per this objective. These concessions have a longer term, typically lasting 30 to 50 years, which provides the company with a long-term perspective on revenue streams.

JSW Infrastructure handles 9 port concessions in India with a cargo handling capacity of 153.43 MTA as of December 2022, while its cargo volume is 61.96 MMT. Net debt as of December 2022 stands at Rs 2,875.31 crore, while operating cash flow stands at Rs 1,095.27 crore.

For FY22, operating income stood at Rs 2,273.06 crore against Rs 1,603.57 crore a year ago. Full-year net profit was Rs 330.44 crore compared to Rs 284.62 crore last year. The EBITDA margin for the year was 51.08%, up from 53.10% a year ago.

JSW Infrastructure is a member of JSW Group, a multinational conglomerate with diversified steel, energy, infrastructure, cement, paint, venture capital and sports assets. As part of the JSW Group, JSW Infrastructure benefits from receiving initial shipments from its anchor customers, which helps accelerate the growth of its assets and improve its capacity utilisation.

In addition, JSW Infrastructure expects to continue to benefit from the growth of various businesses within the JSW Group. For example, JSW Steel aims to increase its installed capacity from 27.7 MTPA in FY23 to 37.00 MTPA in FY2025. Likewise, JSW Energy is targeting 10 GW in FY25 from 4.8 GW in FY23. JSW Infrastructure anticipates this expansion to augment freight volume growth at its existing assets and to lay the groundwork for future growth at the new location.