JSW Infrastructure Ltd., a major player in India's port sector, has earmarked a staggering INR 6,000 crore for strategic asset acquisitions, aiming to bolster its presence in a domain dominated by the Adani Group. With a near-zero net debt to EBITDA ratio, JSW's solid financial position allows it to actively pursue expansion opportunities, including potential stake acquisitions in government-owned ports undergoing privatization. The company eyes projects like the trans-shipment port at Galathea Bay, Great Nicobar Island, showcasing India's pivot towards public-private partnerships to drive port infrastructure growth. JSW Infrastructure's ambitious plans and government support signal promising prospects for industry competition and growth.
JSW Infrastructure Ltd., a major participant in the port sector in India, has allocated an incredible INR 6,000 crore to the purchase of strategic assets as it prepares for significant growth. With this action, it hopes to improve its standing in an industry that the Adani group primarily controls.
According to a JSW Infra senior official, the business is looking into potential stake acquisition prospects in a government-owned port that is about to go through a privatisation process. JSW Infra's chief executive and joint managing director, Arun Maheshwari, highlighted the business's sound financial position by pointing to its nearly zero net debt to Ebitda ratio. Because of its strong financial position, JSW is able to actively pursue expansion prospects, especially those that are thought to provide value.
The potential privatisation prospects offered by the government, including the ambitious trans-shipment port project at Galathea Bay in the Great Nicobar Island, have caught JSW Group’s attention. Maheshwari highlighted that the government’s ownership of approximately 50% of port capacities in India presents significant opportunities for private players, particularly in terminal operations.
In the previous month, Sarbananda Sonowal, the Minister of Ports, Shipping, and Waterways, revealed that the government had received interest from various parties regarding the INR 41,000 crore international trans-shipment port project on Great Nicobar Island. This long-term initiative, anticipated to last between 30 to 50 years, aims to attract investments through a combination of government funding and public-private partnerships (PPP), structured according to different phases of development.
The proposed Andaman and Nicobar port, designed to handle 16 million containers annually, is set for a phased development. With an initial phase costing a staggering INR 18,000 crore and aiming for completion by 2028, it will start with a capacity to manage four million containers. This substantial investment underscores the magnitude of the project and its strategic importance in bolstering India's port infrastructure.
The advantageous geographical position makes it a formidable contender against established trans-shipment centers such as Singapore, Klang, and Colombo. Adani Ports, being India's largest port operator, surpasses JSW Infra by nearly three and a half times in terms of capacity, with the ability to manage 580 million tonnes annually, compared to JSW's 170 million tonnes.
Varun Gogia, vice-president and sector head at ratings agency Icra Ltd., emphasised the importance of substantial financial resources and experience in port management. However, he noted that smaller players still have room for growth, given the conducive environment created by the government’s privatisation initiatives.
The government has indicated that the public-private partnership (PPP) for the Great Nicobar Island port project would operate on a landlord mode, providing private companies with flexibility in infrastructure development based on market assessments. This approach aligns with the government’s goal of attracting investments and fostering growth in the port sector.
JSW Infrastructure’s ambitious expansion plans reflect the evolving landscape of India’s port industry, characterised by privatisation initiatives and increasing competition. With significant investments earmarked and a keen eye on strategic opportunities, JSW aims to solidify its position as a key player in this dynamic sector.
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