Immense opportunities in Indian ports; not focused on international expansion, says JSW Infra CEO

The government still owns about 50 per cent of the Indian port terminal capacity. They want to privatise in a big manner, as they would like to work as a landlord rather than running the port as a business, says Arun Maheshwari.

The initial public offering of port operator JSW Infrastructure Ltd is set to open on September 25. Ahead of it, the company’s Managing Director and Chief Executive Officer Arun Maheshwari spoke with DH’s Arup Roychoudhury of the company assessing opportunities in ports across the country, while deploying part of the funds raised to  to double the capacity of Mangalore container terminal. 

Edited Excerpts:

What are your plans for the funds you raise with the IPO?

This IPO is of Rs 2,800 crore. Out of that, Rs 1,200 crores will go for capital expenditure. We have identified certain projects. One is the LPG project at Jaigarh port, which we are setting up at a cost of Rs 850 crore. Then, we are doubling the capacity of the Mangalore container terminal, which we have just started with overwhelming response. So we are preponing our plans to double capacity with around Rs 150 crore. Then we are repaying one debt of Rs 880 crore, which was a foreign currency loan. And the rest we are using for general corporate purposes.

To what extent are you planning to grow the capacity of the  Mangalore terminal?

As of now, our plan is to expand to 240,000 TEUs (twenty-foot equivalent units, a measurement of how many shipping containers can be stored) in the first phase of expansion. In the second phase we plan to go up to 370,000 TEUs. It will take us about a year to get there.

In FY23, 34 per cent of your business was from third-party players (those outside of JSW Group). What is your outlook for third-party business?

This company started only with captive cargo in 2004. Till 2018 we were doing group cargo. Thereafter, all our investment has been towards third party business development. In 2019 only 6 per cent of our business was from third party. We ended June 2023 with 37 per cent of our business coming from third parties. So we are now three times bigger in third party business, in terms of volume. There isn't a very targeted investment for us to grow third party business, but we have the intention to grow this further. It is difficult to tell by how much and when it will happen, but we feel the growth trend will continue.

What acquisition and expansion opportunities are you looking at?

There are immense opportunities. The government still owns about 50 per cent of the Indian port terminal capacity. They want to privatise in a big manner, as they would like to work as a landlord rather than running the port as a business.

It holds a great opportunity for players like us, who are still one of the largest terminal holders in India. And we would like to continue to be part of that growth journey. We keep assessing such opportunities on the bidding side, (looking at) whether it fits into our overall growth strategy, whether the location is good, whether the product segment is good, whether it has facilities for liquid gas, etc. So accordingly we keep on bidding for the terminals, and will continue to do so. 

What are some of the ports that you're looking at?

There are public-private partnership projects available today from Haldia, Paradip, Tuticorin, JNPT, Kandla, Goa, Vizag etc. We are assessing the opportunities. We may or may not take them, depending on a number of factors. But we are looking at them.

What about expansion plans internationally?

We have no plans on that front because India is offering such great opportunities. I think our focus largely remains towards India. But if there's any compelling opportunity which ticks all our boxes without impacting our balance sheets too much, we don't mind. We are not averse to it. But then, we are not very focused on it.