JSW Infra IPO: Strong listing at 20% premium to IPO price; should you buy, sell, hold?

JSW Infrastructure stock listed at Rs 143 on both NSE and BSE.

With the strong listing of JSW Infrastructure stock at a 20 percent premium over the IPO price, investors are being advised to hold the shares for the long term. JSW Infrastructure stock listed at Rs 143 on both NSE and BSE on October 3 against the issue price of Rs 119 per share.

Analysts recommend holding the stock for the long term owing to the company’s strong fundamentals and JSW group’s strong presence in the industry. Earlier, ahead of the listing, JSW Infra’s grey market premium (GMP) rose to Rs 31.

JSW Infra, the JSW group's first IPO in the last 13 years, received a good response from investors. The Rs 2,800-crore issue was subscribed 37.37 times during September 25-27 with major support from qualified institutional investors who bought 57.09 times the allotted quota. High net-worth individuals subscribed 15.99 times and retail investors 10.32 times the portion set aside for them.

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Should investors buy, sell or hold JSW Infrastructure stock?

Hold partial allotment for long-term: Hem Securities

Astha Jain, Senior Research Analyst at Hem Securities, recommends holding partial allotment for the long term as the company is the fastest-growing port-related infrastructure and the largest commercial port operator in India. Further, the company has predictable revenues driven by long-term concessions, committed long-term cargo and stable tariffs.

“The company’s diversified operations in terms of cargo profile, geography and assets & demonstrated project development, execution and operational capabilities benefit from the strong corporate lineage of the JSW Group and a qualified and experienced management team along with strong financial metrics with a growing margin profile, return metrics and growth,” said Jain.

Hold for long-term: Mehta Equities

Prashanth Tapse, Research Analyst, Senior VP Research at Mehta Equities strongly believe that the JSW Infra IPO gives investors a long-term opportunity to invest in the fastest-growing port-related infrastructure company and second-largest port operator in terms of cargo handling in India. Being part of the reputable JSW Group grants JSW Infra vital support and synergies with the group's growing businesses.

“On the valuation, at the upper price band of Rs 119, the issue is asking for a market cap of Rs 24990 crore. Based on annualised FY24 earnings and fully diluted post-IPO paid-up capital, JSW Infra is asking price a P/E of 19x on the consolidated basis which seems the valuations are reasonably priced. We recommend allotted investors “Hold for long-term”. While those who failed to get allotment can accumulate on the listing day for holding it for healthy long-term returns,” said Tapse.

Hold shares for long-term: Swastika Investmart

JSW Infra’s fundamentals are 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 Ltd.

Hold shares on opening day: StoxBox

Since the company enjoys a strong parentage of JSW Group which has a presence in various sectors in India and offers customer stickiness in the long term, Parth Shah, Research Analyst, StoxBox believes the IPO is reasonably priced. Also, the company has a track record of sustained revenue/EBITDA/PAT performance which grew at a CAGR of 41.2 percent/42.1 percent/62.3 percent during the FY2021-23 period.

“We remain optimistic and recommend investors who have received allotment to hold their shares on the opening day and consider buying on dips as well from a medium to long-term perspective,” said Shah.

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