JSW Infra announced expansion plans at NMPT; IPO proceeds to fund expansion

“The modernization efforts will be undertaken by JSW Infrastructure’s subsidiary—JSW Mangalore Container Terminal Private Limited (“MTPL”). An investment of ₹152 crore will be used from the net proceeds of the IPO to invest in JSW Mangalore Container Terminal for financing its capital expenditure requirements in relation to the Mangalore Container Terminal’s capacity expansion project,” said persons aware of the development.

The construction for the second phase of the concession agreement is expected to commence by September 2023.

JSW infrastructure, the ports business of Sajjan Jindal-led JSW Group, filed for an IPO last week and plans to raise up to ₹2,800 crore through the IPO, which will be used to retire its debt and to fund its capacity expansion projects.

When contacted, JSW Group’s official spokesperson declined to comment.

Persons said the current installed capacity at New Mangalore Container terminal is at 4.2 million tonnes per annum (MTPA).

The concession agreement signed by NMPT grants JSW Infrastructure’s subsidiary exclusive license for designing, engineering, financing, constructing, equipping, operating, maintaining, and replacing the project facilities and services for a period of 30 years.

Pursuant to the concession agreement signed in January 2020, JSW Infrastructure’s subsidiary MTPL is responsible for providing equipment for handling containers and other cargoes 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 commissioned the NMPT container terminal in early 2022. The company had earlier stated the container terminal at NMPT helps them to diversify into container cargo business as part of their strategic roadmap.

The persons mentioned earlier added that this container terminal helps JSW Infrastructure to achieve an optimal cargo mix as part of its strategy to steadily increase the share of third-party cargo business.

According to the CRISIL report, in FY24, container traffic is expected to grow at 5-8% over fiscals 2023-2028. In the medium term, low container traffic per capita in India and containerization’s inherent benefits like cost-effectiveness would act as key levers for driving 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.