jsw infra ipo: Post IPO, JSW Infra will be net debt free as a company: Arun Maheshwari, Joint MD & CEO

In an interview to ET Now, Arun Maheshwari, Joint MD & CEO, JSW Infra, shares his business outlook and talks about the company’s IPO. Edited excerpts:

ET Now: A momentous occasion — the first in 13 years from the JSW stable. So, what will you use the IPO proceeds for?
Arun Maheshwari: The total IPO is for Rs 2,800 crore, out of which Rs 880 crore will go towards the repayment of debts. About Rs 1,200 crore will be towards capex, and Rs 700 crore will be towards general corporate purposes.Give us an idea of your debt picture right now. What does the debt repayment plan look like? Also, the future net debt to EBITDA guidance that you may have in mind…
As on 31st March, if I had to look at it, the total net debt was Rs 2,200 crore. From the IPO proceeds, we will be paying close to about Rs 900 crore. The Rs 700 crore, which is general corporate spending, will be lying in the books.And there has been a free cash flow which the company is generating month on month basis. So post IPO, we will be net debt free as a company.

But there are certain capex moves lined up in our future growth plans. However, as a sustainable guidance, it would be around 2.5 net debt to EBITDA going forward.

What is your existing in-house business — how much is coming from the JSW group per se and how much is coming from third party?
When we started this company in 2004, it was largely a captive company. The genesis of the company happened with an aim to secure the supply chain management of JSW steel and JSW energy. By virtue of that we secured one port terminal in Goa.

Thereafter, we kept on building the ports and we kept on realising that this was a good business to be in — so why don’t we start as a separate vertical?

For a good 14-15 years until 2018, we were handling only captive cargo; there was no outside cargo. Even in 2019, when we were handing 35 million tonnes of total cargo, we were doing only 6% outside the group.

But when the focus shifted, we thought why don’t we develop these separate terminals? In FY23, when we did 93 million tonnes of total cargo, we handled 33% from outside the group. In June ’23, we handled almost 37% from outside the group.

So the growth journey continues. The focus is on investment and the ambition to see it grow as a very independent vertical.

However, it is important to mention that for any port company you need to have a solid anchor customer. Otherwise, the capex would be very high because there are high entry barriers. So you need to have a very solid anchor customer, and what could be better than to have your anchor customer from your own group?

This customer is very growth-oriented too. Be it JSW steel or Cement or Power, everybody in the group s growth-oriented. So, good to have such a solid anchor customer.