India

JSW Infrastructure to invest Rs 13,000 crores to double cargo handling capacity

Synopsis

JSW Infrastructure, a subsidiary of the JSW Group, plans to invest Rs 13,000 crores over the next seven years to double its cargo handling capacity to 300 million tonnes. The expansion will be funded through internal accruals and free cash flows. JSW Infrastructure has grown significantly over the past two decades, with an average annual growth rate of 22%. They have diversified into third-party businesses and are exploring opportunities in container and liquid terminals, container freight stations, and inland container depots. The company is actively participating in port privatization initiatives and aims to enhance last-mile connectivity and value-added services for customers in the logistics industry.

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JSW Infrastructure, a subsidiary of the JSW Group led by Sajjan Jindal, has announced ambitious plans to invest Rs 13,000 crores over the next seven years to double its current cargo handling capacity to an impressive 300 million tonnes. This significant expansion marks a substantial leap for the company, equivalent to the growth it achieved over the past two decades, boasting an average annual growth rate of 22%. 

Over the first 14-15 years, JSW Infrastructure primarily experienced growth from its captive business operations. However, in the last five years, they have successfully diversified into third-party businesses, marking a strategic shift in their operational dynamics. 

The funding for this extensive capital expenditure is expected to be sourced from internal accruals and free cash flows, reinforcing the financial stability of the company. Since its inception in 2004, JSW Infrastructure has developed a substantial cargo handling capacity of 158.4 million tonnes across nine ports and terminals strategically located on both the eastern and western coasts of India. 

In addition to this substantial expansion, the company is also exploring avenues for diversification into container and liquid terminals. Furthermore, it aims to enter the domains of container freight stations and inland container depots, a move aimed at providing comprehensive end-to-end logistics solutions to its customers. 

While JSW Infrastructure remains tight-lipped through its spokesperson, Arun Maheshwari, Joint MD & CEO, recently disclosed the company's intent to bid for three ports worth Rs 2,000 crores under the government's privatization initiative. Winning these bids would potentially increase the company's capacity by an additional 10-12%. 

Market sources also suggest that JSW Infrastructure is actively considering participating in bids for upcoming opportunities involving ports and terminals in various cities, signalling their commitment to expanding their footprint in India's burgeoning logistics sector. 

In a parallel development, JSW Infrastructure is actively participating in tenders for multiple terminals being offered as part of the government's privatization drive through the public-private partnership model. The company has set its sights on terminals in Goa, Haldia, Kandla, Ennore, and Vizagamongothers, with a strong focus on container, liquid, and gas terminals. 

The company's strategic focus revolves around enhancing last-mile connectivity for customers and adding substantial value to their services. This approach aligns with the evolving needs of the logistics industry, where seamless connectivity and value addition are paramount. 

JSW Infrastructure is also exploring the potential of container freight stations and multi-modal logistics parks, recognizing their role in not only improving core business operations but also fostering stronger customer relationships. 

Despite these significant investments and expansion plans, the company's robust financial position instils confidence that it can sustain these bids and projects. Their commitment to growth is evident in their plans to increase their cargo handling capacity to 300 million tonnes by 2030, a substantial endeavour that would require an estimated capital expenditure of ?13,000 crores, primarily funded by the company's free cash flows. 

As part of the JSW Group, JSW Infrastructure is looking to raise Rs 2,800 crores through a primary market offering of fresh shares, signalling their intent to continue investing in their ambitious growth plans. The primary market offering is set to open for subscription in the near future. 

In conclusion, JSW Infrastructure's bold expansion plans reflect their unwavering commitment to playing a pivotal role in India's growing logistics sector. With substantial investments, diversification, and strategic bids on the horizon, the company is poised to make a significant impact on the country's infrastructure landscape, offering comprehensive solutions to meet the evolving needs of customers and the industry.

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