JSW Infra hits 52-week high after PNP Port acquisition

Shares of JSW Infrastructure rose 6% on Tuesday after a subsidiary of India's second-largest commercial ports operator signed a deal to acquire a majority stake in PNP Maritime Services (PNP Port) from Shapoorji Pallonji’ SP Port Maintenance.

JSW Dharamtar Port Private Limited, a wholly-owned subsidiary of Sajjan Jindal-led JSW Infrastructure, will pay ₹270 crore to buy '50% plus 1 shares' of PNP Maritime Services from SP Port Maintenance.

Reacting to the deal, shares of JSW Infrastructure opened at ₹222.80 against its previous closing price of ₹217.60 on the National Stock Exchange (NSE). The stock hit a 52-week high of ₹234.80, taking the company's market cap to ₹48,400 crore. The counter has gained 23% over the past month and 47% in 2023.

The acquisition values PNP Port at an enterprise value of around ₹700 crore with a current capacity of 5 million tonnes per annum (MTPA) and potential to expand to 19 MTPA.

This acquisition is part of JSW Infrastructure’s strategic direction to explore opportunities to expand organically and inorganically, to provide end-to-end logistics services near the cargo consumption generation centres.

"PNP port is expected to strengthen JSW Infrastructure's position to provide Hub & Spoke model services to customers, thereby saving substantially in the logistics costs. JSW Infrastructure intends to upgrade the PNP Port facilities and expand its capacity from current 5 MTPA to 19 MTPA in a phased manner. This acquisition furthers its vision to increase the use of waterways and existing railway facility at PNP adds synergies to the last mile connectivity," the company says.

PNP Port operates multi-purpose jetties at Shahabad in Raigad district of Maharashtra, which is about 20 nautical miles from Mumbai Anchorage. The operational port is connected with road and rail facilities, and services to various industries in Maharashtra, Madhya Pradesh, and Karnataka among others.

"The acquisition of PNP Port is a strategic asset for JSW infrastructure. It will allow the company to service growing share of 3rd party customers in India and derive huge synergies with our existing ports & terminals. It will be able to participate in the Govt. of India Maritime Vision to move cargo through Rail- Sea- Rail route and coastal cargo. At PNP Port, development of Port based industries will be a key focus area and service to multipurpose cargo of Bulk, Container, Liquid etc," the Sajjan Jindal-led company says.

PNP Port's total revenue from operations stood at ₹211.63 crore as per last audited financial for the year ended March 31, 2023.

JSW Infrastructure aims to expand its cargo handling capacity and cargo volume throughput. "Considering the same, this acquisition would help the Company to achieve its growth & expand its footprint," it says.

The acquisition is expected to be complete within 15 days.