Aegis Vopak tanks for growth by £ 2,800 crore IPO - but is the price too high? | Einsmark news

Vopak Terminals, India’s largest tank terminal operator, launched its initial public offer (IPO) of £ 2,800 crore on Monday, which was an important debut in the capital markets for a company central to India’s liquid and gas infrastructure. The company, formed in May 2022 as a joint venture between Aegis Logistics and Vopak India BV, a unit of the global large royal fucking, quickly scaled and built 18 liquid terminal on six ports and two LPG terminals. These terminal stores petroleum products, vegetable oils, lubricants, chemicals and gases such as LPG, propane and butane. Liquid and gas storage are currently about 54.36% and 45.64% of its turnover. A new ammonia storage facility is expected to go directly against FY26. The IPO, priced at £ 223-£ 235 a share, consists of a new problem aimed at dividing debt and finance the expansion of the £ 671 crore of the company’s getogenic LPG terminal in mangoing. If it is fully subscribed, the issue will help to get debt -free. On March 31, 2025, the outstanding loans were at £ 2,474.2 crore. The edition closes Wednesday. From debt -laden to debt -free aegis, a clear financial turnaround has seen since the joint venture was created. The net debt-to-equity ratio dropped sharply by the end of 2024 to 1.32x from a staggering 51.93x in FY22, which is an indication of aggressive decline. Also operationally, Ebitda margins improved from 65.2% in FY23 to 74.2% in the nine months to FY25, while the net profit margins have expanded by nearly 300 basis points since FY24. Murad Moledina, non-executive director of Aegis Vopak, said: “This bursary trading is the last step in preparing and preparing future growth,” said Murad Moledina, non-executive director of AEGIS VOPAK, that the company would triple its liquid capacity and soon drift LPG capacity. “After increasing £ 800 by a private post in October last year, this £ 2,800 crore IPO will help us to become debt-free and finance key projects, such as the £ 671 Crore LPG terminals in mango. It’s about supporting future infrastructure growth,” Moledina said. Brokers look convinced. “Their turnaround is not cyclical, but structural. Post-JV, effectiveness of the throughput, automation and blue-chip customer contracts have lifted structurally margins,” the research team at Bajaj Broking emphasized. The company’s four decades of storage infrastructure experience gave it a cost benefit. It built an LPG terminal with 48,000 tonnes of storage and 4 million tonnes of transfer capacity for £ 450 crore annually, compared to Bharat Petroleum Corp. Ltd.’s £ 1,100 crore for a smaller 30,000 metric tons terminal handling just 1 million metric tons. “Our model focuses on high turnover and low construction costs,” Moledina said. “Even with modest volumes, we deliver strong returns due to high operating margins and minimal overhead,” he claims. According to Bajaj Broking, the JV’s modular expansion model and global best practices are at the heart of its capital light strategy. Expensive bet? Despite strong operations, AEGIS has investigated VOPAK’s IPO valuation. At the top of the price tape, it is valued at a P/E ratio of 258x, much higher than Adani ports and special economic zone (27x) and JSW infrastructure (40x). Moledina counteracted that this multiple is based on historical earnings and that it will look reasonable as soon as interest costs fall to the IPO. “Profitability will rise significantly,” he said. Some analysts are careful after all. “The stock seems to be expensive on both P/e and P/B statistics. Aegis is not directly comparable to Adani or JSW, but the protracted valuation makes it a risky bet in both the short and long term,” says Prashanth Taps, research analyst, senior vice president of research at Mehta Equities. A closer look also reveals the pressure of working capital. Aegis Vopak’s turnover ratio of the debtor, which indicates the rate of debt collection, has risen from 72 days in FY23 to 85 days in FY24 and 87 days by the end of the year. But Bajaj brokers remain optimistic. “The marginal increase in debt -to -date days to 87 is within internal thresholds and reflects temporary customer invoice cycles rather than any structural problem. The company holds strict credit controls and considers it as part of the normal working capital rhythm in a B2B storage model.” Trails peek another red flag is the company’s relatively poor yield statistics. In FY24, the net profit margin was 15.18%, significant among Adani ports (28.73%) and JSW infrastructure (28.78%). Return on equity (Roe) was modest at 8.68% in the same way, compared to 14.86% and 14.1% for its peers. This indicates poorer operational efficiency and lower value creation for shareholders relative to its competitors. “The company runs a independent business that focuses on fluid and LPG handling, unlike its more diversified peers. This leads to lower volumes, but relatively higher margins,” Taps. “While the PAT (profit after tax) has improved margin, it remains weaker compared to peers such as Adani ports and JSW infrastructure,” he added. SBI Securities also warned that the capital-intensive nature of the company, despite its slim model, future equity or debt increases, could necessitate potential pressure on internal growth. Rising energy needs are still, the broader prospects in the industry are encouraging. As India’s economy and energy consumption grows, and with high import dependence for liquid and gas products, demand for storage infrastructure is expected to remain strong. Domestic LPG consumption rose from 12.2 million metric tons (MN MT) in FY09 to 29.7 MN MT in FY24, powered by domestic penetration and cleaning fuel initiatives. This is expected to rise with FY29 to 36-37 MN MT, which implies a 4.5% CAGR over five years. Growing LPG use, especially for cooking and industrial purposes, will increase demand for import-based LPG infrastructure, a key area for AEGIS VOPAK. The promoter, Aegis Logistic, is already one of India’s largest private importers and handlers of LPG, which is run on Singapore via its trade arm.