IPO Size: Rs. 2,800 cr, entirely Fresh Issue

• Rs. 2,016 cr debt repayment of Rs. 2,485 cr gross debt, and become net-debt free
• Rs. 673 cr capex for 82,000 MT cryogenic LPG terminal at Mangalore port

Price band: Rs.223-235 per share

• Rs. 475 cr pre-IPO placement in Nov 2024 to 360 One Fund at Rs 235 per share (2% dilution)

M cap: Rs. 26,037 cr, implying 11% dilution

• Only 10% retail, as company separated from parent in May 2022

IPO Date: Mon 26^th May to Wed 28^th May 2025, Listing Mon 2^nd Jun 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Port Storage Terminals Company  

Aegis Vopak Terminals, 50.1% subsidiary of Aegis Logistics with joint venture partner Royal Vopak of Netherlands, holding 47.3% stake, owns and operates storage terminals across 6 Indian ports (Haldia in West Bengal, Kochi in Kerala, Mangalore in Karnataka, Pipavav and Kandla in Gujarat and JNPA in Navi Mumbai, Maharashtra).

Two Business Divisions

1. Liquid Storage: 18 terminals with capacity of ~1.68 million cubic meters for liquids, of which, 0.1 million added post 31.12.24 at JNPA. Accounted for 54% of company’s Rs. 464 cr revenue in 9MFY25.  
2. Gas (LPG) storage: 2 terminals with 70,800 MT of static capacity for LPG, accounted for 46% of 9MFY25 revenue. Company is expanding LPG storage capacity by 183% to 200,800 MT, at Mangalore (82k MT) and Pipavav terminals. The Mangalore capacity addition, to be funded via IPO proceeds, is likely to get operational next month.

Growing Financials

9MFY25 revenue rose 24% YoY to Rs. 464 cr, with EBITDA up 38% YoY to Rs. 354 cr, translating into 74% EBITDA margin. After Rs. 145 cr finance cost and Rs. 95 cr for depreciation, PAT was reported at Rs. 86 cr, leading to 19% net margin and an EPS of 90 paise.

Till date, company has undertaken Rs. 4,500 cr capex, funded via net worth of Rs. 1,883 cr and debt of Rs.2,485 cr. Post repayment of debt, interest savings will more than double net margin to over 40%, FY26E onwards.

Aggressive Pricing

Factoring in 50% YoY growth with Rs. 160 cr interest cost savings, FY26E EPS is estimated at approximately Rs. 4, translating into a PE multiple of 59x. This is seen very  steep for 11% expected RoE, when parent Aegis, involved in similar line of business, is trading at a PE multiple of 40x with 15% RoE. And, due to management control, Aegis Vopak will continue to be consolidated with parent, even as holding drops to 44.7% post IPO.

Even FY26E EV/EBITDA multiple of 33x is seen more than double that of port operators Adani Ports and JSW Infra. EBITDA multiple of ~15x, pricing in all possible growth of the snext 2-3 years.  

IPO is being undertaken at same price of Oct-Nov 2024, wherein even parent Aegis invested Rs. 325 cr. But we do not find shareholder value at these levels.