JSW Infra's Corporate Rating Upgraded By Moody's On IPO-Led Fundraising

Moody's Investors Service on Tuesday upgraded the rating of the newly listed JSW Infrastructure Ltd. and also changed its outlook on initial public offering-led fundraising as well as cargo volumes.

The rating agency upgraded the JSW Group firm's corporate family rating and senior secured bond rating to Ba1 from Ba2, and changed the outlook to stable from positive.

"The upgrade is driven by a combination of the substantial capital raised from JSWIL's IPO and the growth momentum of cargo volumes at both its existing and new ports. We expect JSWIL to continue its solid operating performance, with its credit metrics consistently within the Ba1 range," said Erman Zhang, a Moody's analyst.

Shares of JSWIL debuted at Rs 143 apiece on the Indian stock exchanges on Tuesday and settled on the first trading day at a premium of about 32% over its IPO price.

The Rs 2,800-crore IPO was subscribed 37.37 times on its final day, Sept. 27. The three-day public issue was priced in the range of Rs 113–119 per share.

Ratings Rationale

Moody's attributed the rating upgrade to the company's IPO fundraising, and as outlined in the prospectus, approximately 31% of these proceeds will be allocated towards debt repayment, while another 42% will support capital expenditure for upgrades and expansions.

The debt reduction is accompanied by the company's solid top-line performance, with a growth rate of 50% in fiscal 2023, which ends on March 31, 2023, up from 46% in fiscal 2022.

Growth was primarily due to the addition of new cargo, driven by JSWIL's planned capacity expansion near the ports, the ratings agency said.

As a result, Moody's projects that JSWIL's funds from operation/debt will be consistently within the 17%–23% range over the next three years, a level supporting the upgrade.

JSWIL provides maritime-related services, including cargo handling, storage solutions, logistics services, and other value-added services, to its customers.