Aegis Vopak Terminals Limited—a prominent joint venture between Aegis Logistics Limited and Royal Vopak—has concluded its ₹2,800 crore initial public offering (IPO), which was open for subscription from May 26 to May 28, 2025. The company operates 20 strategically located tank terminals across key Indian ports, providing crucial infrastructure for liquid and gas logistics. Despite the company’s scale and solid backing, the IPO managed a moderate subscription of 2.09 times, and the Grey Market Premium (GMP) stayed flat at ₹0, reflecting cautious investor sentiment.

IPO Details

The IPO is a 100% fresh issue consisting of 11.91 crore equity shares, priced within a band of ₹223 to ₹235 per share. At the upper band, the company’s post-issue market capitalisation would be approximately ₹26,037.79 crore. Investors had to bid for a lot size of 63 shares, translating into a minimum investment of ₹14,805 for retail participants. High-Net-Worth Individuals (HNIs) were required to invest in a minimum of 14 lots, amounting to ₹2,07,270.

The IPO’s book running lead managers (BRLMs) include ICICI Securities, BNP Paribas, IIFL Capital, Jefferies India, and HDFC Bank, while MUFG Intime India Private Limited is acting as the registrar.

Allotment and Listing

The share allotment will be finalized on May 29, 2025 (Thursday), and investors will be able to check their allotment status online via the registrar’s website using their application number, PAN, or DP Client ID. The stock is slated for listing on the BSE and NSE on June 2, 2025.

Anchor Investor Participation

On May 25, 2025, the company raised ₹1,259.99 crore from anchor investors at ₹235 per share. A total of 5,36,17,021 equity shares were allotted to a select group of institutional investors ahead of the IPO, instilling partial confidence in the offering.

Objective of the IPO

The IPO proceeds will be utilized for:

1. Repayment or prepayment of certain outstanding loans (₹2,015.95 crore)

2. Capital expenditure towards the acquisition of a cryogenic LPG terminal in Mangalore (₹671.30 crore)

3. General corporate purposes

These funds are expected to strengthen the balance sheet and expand the company's storage and logistics infrastructure.

Financial Performance

The financials show a mixed trajectory:

• Revenue from operations rose from just ₹0.03 million in FY22 to ₹3,559.91 million in FY23, and further to ₹5,701.21 million in FY24. The company reported ₹4,761.49 million for the nine months ended December 31, 2024.

• EBITDA grew to ₹4,058.97 million in FY24, compared to ₹2,319.61 million in FY23 and a negative figure in FY22.

• Profit after tax (PAT) climbed to ₹865.44 million in FY24 from a loss of ₹0.75 million in FY23.

• However, key valuation ratios raise concerns:

  • Pre-issue EPS: ₹0.91

  • Post-issue EPS: ₹0.78

  • Pre-issue P/E ratio: 258.24x

  • Post-issue P/E ratio: 300.86x

  • Industry average P/E: 43x

The Return on Capital Employed (ROCE) stands at 8.39%, Return on Equity (ROE) at 8.68%, and Return on Net Worth (RoNW) at 7.51% for FY24.

These metrics suggest that the IPO is fully priced to expensive, given the industry’s average P/E and the modest profitability of the firm.

GMP and Market Sentiment

Unlike other IPOs that show healthy grey market activity, the GMP for Aegis Vopak Terminals remained ₹0, indicating no premium or expected listing gains. While GMP is unofficial and should not be the sole basis for investment decisions, its stagnancy often reflects tepid demand or uncertainty among traders and investors.

SWOT Analysis

Strengths

• Strategic joint venture between Aegis Logistics and Royal Vopak

• Pan-India terminal infrastructure at major ports

• Operational synergy and global best practices

Weaknesses

• High IPO valuation compared to industry standards

• Moderate returns despite infrastructure scale

• History of losses in initial years

Opportunities

• Growing demand for LPG and liquid bulk handling

• Government focus on port infrastructure and energy

Threats

• Competition from PSUs and other private logistics players

• Market fluctuations impacting throughput volumes

• Currency and commodity price risks

Expert Recommendation

Despite the operational scale and strong promoter background, the IPO’s valuation appears stretched, with a P/E ratio that is significantly higher than the industry average. The company’s financials have improved, but the listing gains potential looks weak, especially given the zero GMP and moderate subscription.

Verdict: AVOID for listing gains

Long-term investors who understand the port logistics and energy terminal infrastructure business may evaluate post-listing performance, but short-term traders are advised to skip due to overvaluation and poor GMP sentiment.

Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Investors should consult with certified financial advisors before making any investment decisions. Investing in IPOs involves market risks; read all related offer documents carefully.

About the Author
CA Abhay Kumar (CA Abhay Varn) is a SEBI-registered Research Analyst (INH300008465) and a Chartered Accountant with over 8 years of experience in capital markets. Known for his IPO reviews, he shares insights backed by data and professional analysis.

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