Will JSW Infra match the grey market premium following a successful IPO when it listings on October 3?

 Will JSW Infra match the grey market premium following a successful IPO when it listings on October 3?

Due to JSW Infrastructure's IPO's reasonable valuations when compared to peers, experts believe the premium listing is justifiable.

Given the strong subscription numbers reported by the IPO, the healthy performance in the previous financial years, and the strong parentage support with a diversified customer base, experts predicted that JSW Infrastructure, the second-largest commercial port operator in India, would make its market debut on October 3 with gains of between 15 and 20 percent.

Instead of using the T+3 or T+6 timeline, the stock will list within the T+2 timeline (issue closing date plus two working days) when the allotment, share transfer, and reimbursements processes are finished. Companies starting their IPOs on September 1 are free to choose the new T+3 timeline, which will be required for all IPOs starting on December 1. After RR Kabel, this firm will be the second to list in the T+2 timeline.

During the week of September 25–27, the JSW Group's Rs 2,800–crore public offering was subscribed 37.37 times, mostly thanks to qualified institutional investors who purchased 57.09 times the permitted quota. Retail investors subscribed for 10.32 times as much as high net worth individuals subscribed for 15.99 times.

While listed company Adani Ports and Special Economic Zone traded at 33.8x, JSW Infrastructure is accessible at a P/E (price-to-earnings) of 28.9x on the FY23 financials post issuance, with a market capitalization of Rs 24,990 crore.

Parth Shah, a research analyst at StoxBox, stated, "We anticipate the IPO to open at a premium of roughly 20% to the issuance price of Rs 119 per share.

Parth thinks the IPO is fairly priced because the company has a strong parent in the JSW Group, which is active in many Indian industries and promises long-term client stickiness.

The port-related infrastructure company has a history of consistent revenue, EBITDA (earnings before interest, tax, depreciation, and amortization), and PAT performance, which recorded a CAGR of 41%, 42%, and 62%, respectively, during FY21-23.

According to analysts who requested anonymity, shares were offered at a 20% premium over the upper price band (Rs. 119) in the grey market. The grey market is an unauthorized marketplace where shares can be purchased and sold before they are listed.

"Due to the company's excellent fundamentals and the trends of the market, the subscription demand for the IPO is in line with our estimate. We anticipate a respectable listing gain in the range of 18-20 percent from its issue price of Rs 119 per share given the strong demand from all types of investors and the calm market environment, according to Prashanth Tapse, Research Analyst, Senior VP Research at Mehta Equities.

Considering that rivals are trading at roughly 28–30x IPO values, the parent company has a great track record, and the company is well-positioned to profit from the Indian economy's sustained expansion, he thinks the premium listing is justifiable.

Hem Securities senior research analyst Astha Jain predicts that JSW Infra would list at a premium of 15% to the offering price. According to her, the company's steady tariffs, committed long-term cargo, and long-term concessions are what drive its predictable revenue growth.

In terms of increase in installed cargo handling capacity and cargo volumes handled between FY21 and FY23, JSW Infrastructure is the port-related infrastructure company that is expanding the fastest. In the context of cargo handling capacity in FY23, it is now the second-largest commercial port operator in India.

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