JSW Infra shares jump 7% on fundraising buzz; co says no such proposal

Shares of JSW Infrastructure rallied nearly 7% in intraday trade on Wednesday amid a report that the infrastructure major is looking to raise over ₹5,000 crore via the qualified institutional placement (QIP) route. This is a way to raise capital domestically by issuing equity shares to qualified institutional buyers (QIBs), including mutual funds, pension funds, venture capital funds, and other institutional investors.

The Sajjan Jindal-led JSW Group company, however, has clarified to the exchanges that there is no such proposal for discussion before the board. “We hereby confirm that JSW Infrastructure Limited is currently not in any discussion as referred to in the above captioned news item also no such proposal has been placed for discussion before the Board,” it said in a BSE filing today.

“The company is committed, in keeping its shareholders informed about any material developments or information that may impact its business, financial performance or stock price and in ensuring adherence to all regulatory requirements,” the release noted.

Extending its gaining streak for the third straight session, JSW Infrastructure shares rose as much as 6.9% to ₹338 on the BSE. The stock has surged 10% in three sessions, while it rose nearly 5% in a month and 40% in six months.

The infrastructure heavyweight, which made its market debut on October 3, 2023, has zoomed 184% against the IPO price of ₹119. The stock touched its 52-week high of ₹361 on July 4, 2024, while it slipped to its 52-week low of ₹141.75 on October 3, 2023.

Earlier this week, JSW Infra on September 9 approved a capex of ₹2,359 crore for the capacity expansion at its Jaigarh and Dharamtar Port. As a part of the company’s FY30 growth plan to increase capacity to 400 million tonnes per annum (MTPA) from the existing capacity of 170 MTPA, the board of the respective subsidiary companies has approved a total capacity expansion plan of 36 MTPA (21 MTPA at Dharamtar and 15 MTPA at Jaigarh). The capex plan includes mechanical, civil, and electrical work for the new berths and additional infrastructure, such as railway siding for Jaigarh Port, to boost third-party cargo movement. 

“The expansion will increase the overall capacity of Jaigarh Port to 70 MTPA from the current 55 MTPA, and Dharamtar Port to 55 MTPA from the current 34 MTPA. This expansion primarily aims to cater to the increased cargo volume of the anchor customer on the back of the proposed 5 MTPA steel-making facility at Dolvi, Maharashtra,” the release noted.

The expansion at both ports is expected to generate an additional cargo handling volume of approximately 27 MTPA. Construction at both ports is anticipated to be completed by March 2027, as per the release.

This is the third substantial capex acquisition in 2 months (others being Navkar & slurry pipeline – capital outlay of ₹3,400 crore). “The 3 announcements together (₹5,800 crore) should not stretch JSW Infra’s balance sheet – Equity of ₹8,020 crore, EBITDA of ₹1,960 crore, and net debt of ₹450 crore in FY24,” says InCred Equities in a report.

The report highlighted that the capacity utilisation at 2 ports is just 52% in FY24. Based on planned capex and ramp-up in cargo (27 million tonnes), utilisation at Jaigarh and Dharamtar would be just 58% post capex completion.  

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