JSW Infrastructure, part of the $23-billion JSW Group, has ambitions of becoming a big player in the port sector with a four-pronged strategy of acquisitions and expansion, said its joint MD & CEO Arun Maheshwari. “…the way the Indian economy is growing, India needs more and more ports and assets like that. Today, our balance sheet supports it, and our intention is to become big in this sector. I think we will be able to make it big,” Maheshwari told businessline. In the second quarter of FY24, the company handled close to 24 million tonnes of cargo, up 27 per cent on year, driven primarily by increased capacity utilisation. Its net profit rose 85 per cent to ₹256 crore, while revenue was 29 per cent higher at ₹895 crore.

The recently listed company, through a subsidiary, also signed an agreement with MPT Commodities of the Mercuria Group, Switzerland, to acquire a liquid storage facility of 465,000 cubic meters capacity at the Fujairah port in UAE for $187 million. Fujairah Port is the second-largest bunkering hub in the world after Singapore.

Q

Could you give the rationale for your acquisition in the UAE?

We have been entering new spaces of business over the last four years, initially starting with a small investment in the Mangalore container terminal. Now, we are investing in the second phase. Similarly, we started an LNG terminal at Jaigarh port… we are going very big with that, spending about $200 million. Now, we are getting into the liquid space through the Fujairah terminal.

We have a good value opportunity there, it gives us the chance to understand the business, the nuances of the system and, thereafter, we can venture into it if there’s an opportunity within India, or we can expand our existing terminals if we see a necessity. It’s a good business to be within India.

Q

Your Q2 volumes were driven primarily through an increase in capacity utilisation. What is your growth strategy for the future?

Any asset construction in the port sector requires a lot of gestation period. If we have to construct a greenfield port it will take about 3-5 years. If we have to bid for a terminal from the government ports, it will take one to two years’ time. If we acquire assets, then operations are immediate. We have a mix and match of everything.

So, future growth will come through a mix of existing asset utilisation, acquisition of assets, winning bids for government terminals, as well as greenfield ports. So, it will be a four-pronged strategy to grow in terms of volume, value, and target segments

Q

What kind of headwinds do you foresee?

I don’t see many major headwinds in the sector. The government has set the procedures very correctly. It is a smooth, robust, and transparent process. With respect to acquisitions, there are not many opportunities in India for big assets, but there are smaller assets that can be looked at.

Those can be made big because the way the economy is growing, India needs more and more ports and assets like that. Today, our balance sheet supports it, and our intention is to become big in this sector. I think we will be able to make it big.

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