JSW Infra plans to raise up to 1,500 cr from PE, says CEO B V J K Sharma

Interview with BVJK Sharma, chief executive officer of JSW Infrastructure

JSW Infrastructure, one of the leading private port developers, is looking to raise Rs 1,000-1,500 crore from private equity to clear debts and fund its expansion plans. Having lined up a capital expenditure of Rs 7,000 crore, it is looking to reach a port capacity of 200 million tonnes per annum (mtpa) by 2020. It plans to foray into container-handling and is eyeing opportunities at the mega crude oil refinery proposed by public sector undertakings. BVJK Sharma, chief executive officer of JSW Infrastructure, talks to Jayajit Dash on the company’s plans. Edited excerpts:

JSW Infrastructure is looking to offload 15 per cent equity. Which private equity players or strategic investors are you talking to?

We are growing at a rapid speed and target to reach 200 mtpa cargo handling capacity by 2020 at our various ports from the current 70 mtpa. With this target in our mind, JSW Infrastructure is likely to first go for a private placement to the level of 10-15 per cent.

Can you elaborate on your upcoming investments in the port business?

The company is working to receive the Valemax, the largest ever 400,000 tonnes iron ore carrier and also 350,000 tonnes crude carriers in the country. The company has planned a capital expenditure of Rs 7,000 crore in its various ports over the next three years. 

JSW Infrastructure has already invested Rs 2,000 crore in JSW Jaigarh Port and plans to spend additional Rs 2,000 crore in it. Apart from Jaigarh and Dharamtar port in Maharashtra and South West Port in Goa, the company is also developing an iron ore and coal export terminals at Paradip Port in Odisha, in a PPP (public-private partnership) model, which will have a capacity of 48 mtpa.

JSW Infrastructure has plans to set up a greenfield port in The United Arab Emirates (UAE). By when is the port expected to come up? What is the estimated investment and facilities proposed?

We have recently forayed into our first foreign venture through inking of an agreement with the Port of Fujairah (UAE) for management of mechanised bulk cargo handling terminals. They have selected JSW Infrastructure due to our expertise in port operation and management.

Fujairah Port is one of the largest deep draft, all-weather ports and currently handles approximately 100 mtpa which is poised to increase to 150 mtpa in next two years. It seamlessly handles a variety of cargoes such as dry and liquid bulk, crude, break bulk, and containers. At this port, container terminals are managed by DP World, and henceforth, JSW Infrastructure will manage mechanised bulk cargo terminals, enhancing the port’s efficiency and reducing the operating cost.

What opportunities are you eyeing at the mega crude oil refinery planned by oil marketing companies, including IOCL, BPCL and HPCL in Maharashtra?

JSW Jaigarh Port currently handles dry and liquid bulk cargo but has plans to enter container handling. The company is eyeing at various opportunities at the proposed refinery by Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation in the Konkan coast of Maharashtra as the port will be equipped to handle crude oil for the refineries. 

We are developing berthing facilities for dry bulk carriers, liquefied natural gas (LNG) carriers, largest container vessels and very large crude carriers (VLCCs). Jaigarh Port can function as a captive port to handle very large crude-carrying ships and also export refined petroleum products. We have also tied up with the Hiranandani Group, which is investing around Rs 4,000 crore to construct an LNG terminal at Jaigarh port.

JSW Infrastructure has planned to go for an initial public offering (IPO) by 2020. How much do you expect to mop up from the issue?

After private placement, the company would come up with an IPO around 2019 when the ports are likely to reach to 100 mtpa capacity. The target is to reach 200 mtpa cargo handling capacity by 2020.

As of now, what is the company's debt load? What options are you considering to deleverage?

JSW Infrastructure’s current debt on books is Rs 1,600 crore. The company is looking to raise about Rs 1,000-1,500 crore to place private equity or strategic partners. The funds will be used for expansion and partly to pay off some debt. Its is likely to post an Ebitda (earnings before interest, taxes, depreciation and amortisation) of Rs 650 crore in FY17 compared to Rs 500 crore in FY16.