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JSW defers plans to tap PE fund for ports expansion

The Sajjan Jindal-led JSW group has deferred a private equity infusion into its ports arm as the deal to acquire APM Terminals’ stake in the Pipavav Port in Gujarat has been delayed, top officials have said.

JSW Ports will instead be looking at a pre-IPO placement from private equity funds in early 2020 and will go for a listing immediately afterwards.

“Right now, I think we have deferred it,” Jindal, the group chairman said.

BVJK Sharma, the chief executive and joint managing director of JSW Infrastructure, the holding company of the ports business, concurred on the deferment of private equity infusion, stating that it was planned keeping the Pipavav acquisition in mind.

“We were looking at Pipavav acquisition and they have deferred it now. When there is no need, things get deferred,” Sharma said.

In June 2017, there were media reports that APM was looking at selling its majority stake in the listed ports company as part of a global strategy, 12 years after first investing in the asset. One report also pointed to JSW being the frontrunner.

Sharma said under the revised plan, the company which primarily counts on JSW group companies for its cargo handling, plans to invest through internal accruals and will look at a round of PE infusion ahead of its initial public offering.

It plans to have the PE investment by early-2020, which will be followed by a listing in late-2020, he said.

The company, which has a capacity to handle 75 million tonne cargo per annum across assets and targeting to increase it to 200 MTPA in three years, clocked a pre-tax profit of Rs 735 crore in the fiscal year to March 2018.

It is targeting to increase this to Rs 750 crore in the current fiscal year and take it up to Rs 2,400 crore by fiscal year 2021, when the listing is planned, Sharma said.

Sharma explained that there is some work happening at its plant in Dolvi in Maharashtra’s Raigad district, which will restrict the growth in bottomline but hinted that once it is completed by 2020, there will be faster growth.

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