In a significant development, the JSW Infrastructure IPO(Initial Public Offering) witnessed remarkable success as the retail segment saw oversubscription by a staggering 4.55 times on the second day. This marked a positive step in the company’s journey to raise capital and expand its operations. Let’s delve deeper into the details of this remarkable IPO.
Overview of JSW Infrastructure IPO
The JSW Infrastructure IPO commenced on Monday, September 25, and is scheduled to close on Wednesday, September 27. This IPO garnered immense interest from investors right from the beginning. With a fixed value band for the public proposal ranging from ₹113 to ₹119, the company aimed to attract a wide range of investors.
Retail Investors Show Enthusiasm
One of the standout features of the JSW Infrastructure IPO was the overwhelming response from retail investors. The retail segment, which is typically composed of individual investors, showed an impressive subscription rate. On the second day of the IPO, it was reported that the retail segment was oversubscribed by a remarkable 4.55 times.
Subscription Breakdown
To provide a comprehensive overview, here’s a breakdown of the subscription status in different segments:
- Retail Investors: As mentioned earlier, the retail segment garnered substantial interest, with an oversubscription rate of 4.55 times. This indicates the strong confidence that individual investors have in the JSW Infrastructure’s prospects.
- Non-Institutional Investors: The non-institutional investors’ segment also witnessed a substantial response, with offers totaling 13,76,27,658 shares against the available 3,71,68,141 shares.
- Qualified Institutional Purchasers (QIBs): The QIB segment received offers for 4,07,83,680 shares, representing 55% of the shares available for this segment.
Use of Proceeds
The JSW Infrastructure IPO involved a fresh issuance of ₹2,800 crore worth of shares, without any offer for sale (OFS) component. According to the Red Herring Prospectus (RHP), the company plans to utilize the net proceeds from the offering in various strategic ways:
- Investment in Fully Owned Subsidiaries: The company intends to invest in its fully-owned subsidiaries, JSW Dharamtar Port Private Limited and JSW Jaigarh Port Ltd. These funds will be used to prepay or partially repay specific outstanding borrowings.
- Capital Expenditure: JSW Infrastructure also plans to allocate funds for capital expenditure requirements. This includes investments in JSW Jaigarh Port Ltd for expansion and upgrade projects at Jaigarh Port, such as the construction of an LPG terminal, the establishment of an electric sub-station, and the purchase and installation of a dredger.
Book Running Lead Managers
The JSW Infrastructure IPO is being managed by several reputed book running lead managers. The prominent names include JM Financial Ltd, Axis Capital Ltd, Credit Suisse Securities (India) Private Ltd, DAM Capital Advisors Ltd, HSBC Securities and Capital Markets (India) Private Ltd, ICICI Securities Ltd, Kotak Mahindra Capital Company Ltd, and SBI Capital Markets Ltd. KFin Technologies Ltd is the registrar for the IPO.
GMP and Listing Price
As per the information available, the Grey Market Premium (GMP) for the JSW Infrastructure IPO is currently at +18, which indicates that the shares are trading at a premium of ₹18 in the unofficial market. Considering the upper end of the IPO price band and the GMP, it is estimated that the listing price of JSW Foundation shares could be around ₹137 each. This represents a substantial increase of 15.13% over the IPO price of ₹119.
The “dark market premium” is an indication of investors’ willingness to pay more than the issue price for the shares.
Conclusion
The JSW Infrastructure IPO has clearly struck a chord with investors, especially in the retail segment, where oversubscription reached 4.55 times. With a robust plan for the utilization of proceeds and strong interest from both retail and institutional investors, the company appears to be on a promising path.