JSW Infrastructure Strengthens Logistics Footprint with ₹1,212 Crore Acquisition of Three Rail Logistics Arms

Introduction In a significant strategic move to bolster its end-to-end logistics capabilities, JSW Infrastructure has announced that its subsidiary, JSW Port Logistics, will acquire three rail logistics companies from JSW Shipping & Logistic. The all-cash transaction, valued at an enterprise value of ₹1,212 crore, marks a pivotal step in the company’s expansion into the rail freight sector.

 

 

The Deal Structure The acquisition involves the purchase of a 100% stake in three key entities: JSW Rail Infra Logistics, JSW Minerals Rail Logistics, and JSW (South) Rail Logistics. The transaction will be executed through a Share Purchase Agreement (SPA). Upon completion, these three companies will become step-down wholly-owned subsidiaries of JSW Infrastructure.

Strategic Advantage: Access to Key Railway Schemes This acquisition is not just about assets; it is about strategic access. By bringing these entities under its fold, JSW Infrastructure gains immediate entry into two of Indian Railways’ most critical freight programs:

• General Purpose Wagon Investment Scheme (GPWIS)

• Liberalised Special Freight Train Operator (LSFTO) Scheme

These licenses allow for greater operational flexibility and efficiency in moving freight across the country, a core requirement for heavy industries.

Operational Assets and Fleet Expansion The deal comes with substantial operational muscle. The acquired entities currently possess a fleet of 21 rakes (as of November 30), with four additional rakes scheduled for delivery. All rakes operate under long-term licenses granted by the railway schemes.

JSW Infrastructure has outlined an aggressive growth roadmap for this new division. The company aims to nearly double its rake fleet to 45 by FY27 and further scale it to 110 rakes by FY30. This expansion aligns with the company’s broader strategy to create a robust, integrated logistics platform, following its entry into last-mile logistics with the acquisition of Navkar Corp in October 2024.

Financial Impact and Projections According to the company’s BSE filing, the transaction is expected to be EPS (Earnings Per Share) accretive from the very first day of operations. The rake operator business model is particularly attractive due to its dual revenue stream:

1. Rebates from Indian Railways.

2. Market Premiums charged to customers.

This structure provides stable, annuity-like earnings, largely backed by core industries such as steel and cement. JSW Infrastructure projects that the acquired businesses will deliver an annualized EBITDA of ₹150 crore by FY27, translating to an attractive EV/EBITDA multiple of 8.1x.

Path to Completion The transaction is contingent upon the fulfillment of specific conditions outlined in the SPA, including necessary regulatory approvals from the Ministry of Railways and JSW Infrastructure shareholders. The company expects to close the deal within 30 days of meeting all precedent conditions.