JSW apportions 6,000 crore for acquisitions in port sector

India currently has 13 major seaports and over 180 minor ports, accounting for the bulk movement of its maritime traffic. (Photo: Bloomberg News)
India currently has 13 major seaports and over 180 minor ports, accounting for the bulk movement of its maritime traffic. (Photo: Bloomberg News)

Summary

  • JSW Group is evaluating all privatization prospects offered by the government, including the ambitious trans-shipment port project at Galathea Bay in the Great Nicobar Island

New Delhi: JSW Infrastructure Ltd, a private port operator, has earmarked about 6,000 crore for acquiring strategic assets, with an aim to bolster its presence in an industry dominated by the Adani group. The firm is exploring a stake acquisition in a government-owned port slated for privatization, a senior executive of the company said.

Arun Maheshwari, joint managing director and chief executive of JSW Infra, said the company has one of the strongest balance sheets in the ports sector and the headroom is good enough to expand aggressively, as long as the opportunity is value accretive. “Today, our net debt/Ebitda is virtually zero and with the kind of Ebitda we have, I can safely spend 5,000-6,000 crore without blinking," he said. Ebitda is earnings before interest, taxes, depreciation and amortization.

JSW Group is evaluating all privatization prospects offered by the government, including the ambitious trans-shipment port project at Galathea Bay in the Great Nicobar Island.

Pointing out that the government owns about 50% of port capacities in India, which throws opportunities for private players big in terminal operations, Maheshwari said the company is assessing the upcoming Nicobar project. “Once it comes into the block for bidding or offers, that time we will assess and see how we can participate," he added.

Last month, Sarbananda Sonowal, the minister of ports, shipping and waterways had announced that the government has received expressions of interest from 11 entities for the 41,000-crore international trans-shipment port project in Great Nicobar Island. This initiative, expected to span 30 to 50 years, will attract investments through government and public-private partnerships (PPP) based on its phase requirements.

The proposed Andaman and Nicobar port, designed to handle 16 million containers annually, is set for a phased development. With an initial phase costing 18,000 crore and aiming for a 2028 completion, it will start with a capacity to manage four million containers.

The strategic location near major trade routes positions it as a competitor to existing trans-shipment hubs like Singapore, Klang, and Colombo.

Adani Ports is India’s largest port operator and is about three and a half times larger than JSW Infra with a capacity to handle 580 million tonnes per annum, compared to JSW’s 170 million tonnes.

“In the realm of port management and operation, substantial financial resources and a wealth of experience are imperative. (Only a) few entities in the domain are equipped with both and supported by their robust balance sheet. Despite the formidable presence of any one company, smaller players have ample expansion opportunities, fuelled by the government’s commitment to port privatization, ensuring a conducive environment for growth," said Varun Gogia, vice-president and sector head at ratings agency Icra Ltd.

The government has said the PPP for this project would be on landlord mode, in which the private company will have flexibility to develop storage area, container handling equipment and other infrastructure based on its own market and business assessment, among other benefits.

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