JSW Infrastructure, a JSW group company has filed for an initial public offering (IPO) to invest in 152 crores at New Mangalore Container Terminal for container capacity expansion in the second phase.
“The modernization efforts will be undertaken by JSW Mangalore Container Terminal Private Limited (“MTPL”) – a subsidiary of JSW Infrastructure. JSW to invest in Mangalore Container Terminal Rs 152 crore from the net proceeds of the IPO will be used to meet its capital expenditure requirements in relation to the capacity expansion project of Mangalore Container Terminal.
The construction of the second phase of the concession agreement is expected to begin by September 2023.
JSW Infrastructure, the ports business of the Sajjan Jindal-led JSW Group, filed for an IPO last week and plans to raise up to Rs 20 lakh. 2,800 crore through the IPO, which will be used to repay its debt and finance its capacity expansion projects.
When contacted, the official spokesperson of JSW Group declined to comment.
The current installed capacity of the New Mangalore Container Terminal is 4.2 million tonnes per annum (MTPA), the people said.
The concession agreement signed by NMPT grants exclusive license to the subsidiary of JSW Infrastructure to design, engineer, finance, construct, equip, operate, maintain and convert project facilities and services for a period of 30 years.
As per the concession agreement signed in January 2020, MTPL, a subsidiary of JSW Infrastructure, is responsible for providing equipment for handling containers and other cargo at New Mangalore Port on DBFOT (Design, Build, Finance, Operate and Transfer) basis.
The concession agreement with JSW Infrastructure allows for a capacity of up to 6.02 MTPA.
JSW Infrastructure commissions the NMPT container terminal by early 2022. The company had earlier said that the container terminal at NMPT helps them diversify into container cargo business as part of their strategic roadmap.
The individuals mentioned earlier said that this container terminal helps JSW Infrastructure achieve the optimum cargo mix as part of its strategy to continuously increase the share of third-party cargo business.
As per CRISIL report, in FY24, container traffic is expected to grow by 5-8% as compared to FY2023-2028. In the medium term, the inherent benefits of containerization such as low per capita container traffic and cost-effectiveness in India will act as major drivers for growth in container traffic. Non-major ports are expected to add 100-130 million tonnes of capacity between FY23 and FY27. The container segment is expected to dominate in terms of tonnage.
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