Eye on IPO, JSW Infrastructure likely to pump Rs 5,100 crore into capacity expansion by 2020

JSW Infrastructure, the port operating arm of the JSW Group, aims to spend Rs 5,100 crore for capacity expansion till 2020, by which time it also aims for its maiden public issue of shares, its CEO said in a recent interview.


The company had in 2015 charted a five-year capex plan of Rs 10,000 crore. That was later optimised to Rs 8,800 crore of which it has already spent Rs 3,700 crore BVJK Sharma told ET.


The money will be spent in more than doubling its total annual cargo handling capacity to 200 million tons from 75 million tons.

Sharma said the ports business aims to end this financial year with an earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs800 crore but with the group company expansions and resultant increase in business, may triple it to Rs2,400 crore by 2020. He also said the company aims to reach 70% utilisation levels at its faciltities, up from 40% now. These two benchmarks will make it IPO ready by December 2020, he added.

“In line with the other businesses of the group and the growth plans of steel, energy, cement, we are working with them to see how best we can provide logistics support to our own verticals..and then offer capacity to non-group players and sweat the assets that we create,” said Sharma. The company currently has three operating terminals: at Jaigarh and Dharamtar, Maharashtra and in Goa. The capacity at Jaigarh port will be doubled to 80 million tons, while the berth at Goa will be increased to 15 million tons. The Amba riverbed that has the Dharamtar port near JSW Steel’s Dolvi plant will be dredged to allow bigger vessels. There is also a fresh 50 million ton facility coming up at Paradip, Odisha which will spur the company’s third-party revenue.

The company is also looking at setting up a port city in Jaigarh, a dry port in Kolhapur and is looking at sites for greenfield ports in Odisha, Maharashtra and Karnataka.

Sharma said half of the planned capex will come from internal accruals while the remainder will be funded via debt.

The company’s plans closely follow its group companies’ expansion trajectory as most of its cargo—about 90%— comes from captive sources.

The group’s flagship venture - JSW Steel in May said it has a capital expenditure plan of Rs 44,000 crore by the end of March 2020, increasing the number from the earlier earmarked Rs 26,800 crore. It now aims to reach a production capacity of about 25 million tons in the next two years, up from its earlier aimed capacity of 23 million tons.

JSW Cement recently said it plans to increase production capacity in West Bengal to 3.6 million tons from 2.4 million tons besides setting up a captive power plant in the same location.

JSW Energy in May announced an increased capex plan of Rs 6,500 crore for its new electric vehicle venture.

Sharma however said that the new facilities at Jaigarh and Paradip will boost third party cargo for the ports. The company aims to have a 60:40 split between captive cargo and third party cargo in the next few years, up from the current split of 90:10.