Aegis Vopak Terminals IPO: Check IPO Date, Lot Size, Price & Details

Introduction:

The company is a joint venture between Aegis Logistics Limited ("Aegis") and Vopak India BV. One of its promoters, Aegis, is a publicly listed Indian conglomerate engaged in sourcing, storage, distribution, and third-party logistics services across the oil, gas, and chemicals sectors. The other promoter, Vopak India BV, is a subsidiary of Royal Vopak—a Netherlands-headquartered, publicly listed company and one of the world’s leading tank storage service providers, with over 400 years of experience in the storage industry.

As of December 31, 2024, the company is the largest third-party owner and operator of tank storage terminals for liquified petroleum gas (LPG) and liquid products in India, based on storage capacity. It holds the largest share in the LPG tank storage segment in India, accounting for approximately 11.5% of the country's total static LPG storage capacity. In the liquid storage segment, the company is the leading third-party service provider, contributing around 25.53% of the total third-party liquid storage capacity in the country.

The company's infrastructure network includes strategically located terminals at five key ports on both the west and east coasts of India. Collectively, these ports handle approximately 23.0% of the nation's liquid imports and 61.0% of total LPG import volumes. The terminals are equipped with a comprehensive suite of facilities, including storage tanks, firefighting systems, self-owned pipelines connected to jetties, loading and unloading infrastructure, and multi-modal evacuation capabilities via ship, rail, road, and pipeline.

The company operates through two primary business segments:

• Gas Terminal Division: Focused on the storage and handling of LPG, including propane and butane.
• Liquid Terminal Division: Engaged in the storage and handling of various liquid products, including petroleum, chemicals, and vegetable oils. The company manages over 30 types of chemicals across multiple categories, as well as more than 10 types of edible and non-edible oils.

Approximately 35% of the company's revenue is derived from the Gas Terminal Division, with the remaining contribution from the Liquid Terminal Division. As of December 31, 2024, the company owns and operates two LPG storage terminals at two Indian ports and 18 liquid storage terminals across five ports, supporting both coastal trade and international import/export operations. It has a total liquid storage capacity of approximately 1.68 million cubic meters and a static LPG storage capacity of 70,800 metric tonnes.

IPO Details:

Objectives of Issue:

• Repayment or prepayment of all or a portion of certain outstanding borrowings availed by the Company.
• Funding capital expenditure towards the contracted acquisition of the cryogenic LPG terminal at Mangalore.
• General corporate purposes.

Key Strengths:

• Attractive Market Oppurtunity – In addition to the steady and increasing demand for LPG from the domestic cooking segment, industrial adoption of LPG is also expected to rise. This growth will be driven by the Government of India’s strong emphasis on reducing carbon dioxide emissions from liquid fuels. Given that approximately 60% of the country’s total LPG demand between Fiscal 2024 and Fiscal 2029 is projected to be met through imports, this trend will further bolster the need for import-based infrastructure.Moreover, India is currently the second-largest importer of ammonia—a derivative of green hydrogen. With the Government’s strategic push to position the country as a global manufacturing hub for green hydrogen and its derivatives, there is likely to be a significant increase in demand for port-based storage infrastructure to support these developments.
• Diversified Customer Base- Leveraging the strong legacy and long-standing relationships of its promoter, Aegis, the company has successfully built its own robust customer base. Its strategically located terminals—distinct from but complementary to Aegis’s network—have enabled the company to acquire and continue servicing several of Aegis’s key customers.As of December 31, 2024, the company serves a diversified portfolio of over 400 customers, including major national oil marketing companies (OMCs). It has broadened its reach across multiple industries and sectors, catering to traders, end-users, manufacturers, and fuel marketing companies from both public and private sectors, as well as domestic and international markets.The customer concentration remains low, with the top five customers contributing approximately 30% of total revenue, and the top ten accounting for around 45%. This highlights the company’s well-diversified customer base and minimal reliance on any single client.

Risks:

• Over Dependency on Promoters – The company operates as a joint venture between Aegis Logistics Limited (“Aegis”), a publicly listed Indian company specializing in sourcing, storage, and third-party logistics services in the oil, gas, and chemicals sectors, and Vopak India BV, a subsidiary of Koninklijke Vopak N.V., a Netherlands-based global leader in tank storage solutions.The company has developed a broad and diversified customer base, supported in part by the longstanding industry presence and strong customer relationships of its promoter, Aegis. With over five decades of experience, Aegis has built enduring relationships with numerous Indian and international clients. Additionally, Aegis continues to utilize the company’s terminals for its own LPG terminalling and storage requirements, including bulk procurement of LPG, thereby providing a stable and recurring revenue stream. However, any deterioration in the relationship between the joint venture partners could potentially impact the company’s operations and business continuity.
• Undue Dependence on the west coast - A significant portion of the company’s terminals are located along the west coast of India, which contributes approximately 90% of its total revenue. Consequently, any adverse developments impacting operations in this region could materially affect the company’s business performance, financial condition, operating results, and cash flows.
• Oil and Gas Sector Drive Company’s Revenue which creates company business highly volatile - The company’s operations are closely linked to the level of exploration, production, development activities, and capital expenditures undertaken by oil and gas companies. Over 35% of the company’s revenue is derived from clients operating within the oil and gas sector. Consequently, any prolonged decline in global oil and gas prices could lead to reduced capital spending by these companies, resulting in a corresponding decrease in demand for the company’s storage services.Conversely, a sustained increase in oil and gas prices may dampen consumer demand for oil and gas-derived products such as petrol, diesel, and chemicals. This, in turn, could reduce the financial incentive for oil and gas companies to invest in capacity expansion, potentially impacting the demand for the company’s storage infrastructure. Moreover, continued volatility in oil and gas prices can lead to the postponement or cancellation of capital projects, further affecting service demand.Historically, global oil and gas markets have exhibited high levels of price volatility, a trend that is expected to persist. As a result, the company may experience fluctuations in the demand for its storage services.In addition, any major upgrade, renovation work, or physical damage to the terminals may lead to operational disruptions, which could adversely impact the company’s business operations, cash flows, and financial performance.

Financial Snapshot:

KPI comparison with Industry Peers

Conclusion:

The company operates in a high-growth sector, supported by strong fundamentals—particularly the fact that India imports a significant portion of its liquid requirements.

While a comparative analysis of the income statement shows the company outperforming its peers in terms of revenue growth, EBITDA, and PAT margins, this is largely attributable to its smaller base. However, from a balance sheet perspective, the company is more highly leveraged than its peers and has a lower interest coverage ratio, which may normalize as the company scales its operations.

On the valuation front, peer companies are trading at an average P/E multiple of around 40, whereas the company is priced at a significantly higher P/E of 235 based on its pre-IPO EPS, indicating a steep valuation. Given this elevated pricing, investors may consider avoiding the IPO at this stage.