JSW Infrastructure: Strong debut, lists over 20% premium; Should you hold or book profit? JSW Infrastructure shares listed at 20.16% premium over the IPO price on bourses on Tuesday. The share debuted at Rs 143 on the NSE, as compared to the issue price of Rs 119. The investors have made a profit of Rs 24 per share as the scrip gave more than 20% returns to investors on the listing. “The IPO was subscribed 37.37 times, which is a strong indication of investor interest. The company’s fundamentals are also strong, with consistent revenue and profit growth in recent years. Additionally, the company is well-positioned to benefit from the growing Indian economy. Overall, the listing of JSW Infrastructure was a success. The company’s strong fundamentals and good subscription levels were positive factors for this. Investors who participated in the IPO can hold on to their shares for the long term,” said Shivani Nyati, Head of Wealth, Swastika Investmart. JSW Infra is the 2nd largest commercial port operator in India, handling 92.8 million MT in FY23 (43% CAGR over FY21-23). 63% of volumes is derived from JSW Group customers while the balance 37% is from 3rd party customers which it plans to further increase to achieve a balanced customer base. The company’s EBITDA rose at 31% CAGR (FY20-1QFY24) driven by volume growth.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.