Aegis Vopak Terminals, India’s largest tank terminal operator, on Monday launched its ₹2,800-crore initial public offering (IPO), marking a key capital markets debut for a company central to India’s liquid and gas storage infrastructure.
Formed in May 2022 as a joint venture between Aegis Logistics and Vopak India BV, a unit of global major Royal Vopak, the company has quickly scaled up, building 18 liquid terminals at six ports and two LPG terminals. These terminals store petroleum products, vegetable oils, lubricants, chemicals, and gases such as LPG, propane, and butane.
Liquid and gas storage currently account for about 54.36% and 45.64% of its revenues, respectively. A new ammonia storage facility is expected to go live by FY26.
The IPO, priced at ₹223– ₹235 per share, comprises a fresh issue aimed at paring debt and funding the ₹671-crore expansion of the company’s cryogenic LPG terminal in Mangalore. If fully subscribed, the issue will help Aegis Vopak become debt-free. As of 31 March 2025, its outstanding borrowings stood at ₹2,474.2 crore. The issue closes on Wednesday.
From debt-laden to debt-free
Aegis Vopak has seen a marked financial turnaround since the joint venture was created.
Its net debt-to-equity ratio dropped sharply to 1.32x by end-2024 from a staggering 51.93x in FY22, signalling aggressive deleveraging. Operationally too, Ebitda margins improved from 65.2% in FY23 to 74.2% in the nine months through FY25, while net profit margins expanded by nearly 300 basis points since FY24.
“This IPO is the final step in deleveraging and preparing for future growth,” said Murad Moledina, non-executive director at Aegis Vopak, in an interaction with Mint, adding that the company has tripled its liquid capacity and will triple LPG capacity soon.
“After raising ₹800 crore through a private placement last October, this ₹2,800-crore IPO will help us become debt-free and fund key projects like the ₹671-crore LPG terminal at Mangalore. It’s all about supporting future infrastructure growth,” Moledina said.
Brokerages seem convinced.
“Their turnaround is not cyclical, but structural. Post-JV, throughput efficiencies, automation, and blue-chip client contracts have structurally lifted margins,” highlighted the research team at Bajaj Broking.
The company’s four decades of storage infrastructure experience has given it a cost advantage. It built an LPG terminal with 48,000 metric tonnes of storage and 4 million metric tonnes of throughput capacity annually for ₹450 crore, compared with Bharat Petroleum Corp. Ltd’s ₹1,100 crore for a smaller 30,000 metric tonne terminal handling just 1 million metric tonnes.
“Our model focuses on high asset turnover and low construction costs,” Moledina said. “Even with modest volumes, we deliver strong returns due to high operating margins and minimal overheads,” he claims.
The JV’s modular expansion model and global best practices, according to Bajaj Broking, are at the core of its capital-light strategy.
Expensive bet?
Despite strong operations, Aegis Vopak’s IPO valuation has drawn scrutiny.
At the upper end of the price band, it is valued at a P/E ratio of 258x, far higher than Adani Ports and Special Economic Zone (27x) and JSW Infrastructure (40x). Moledina countered that this multiple is based on historical earnings and will look more reasonable once interest costs fall post-IPO. “Profitability will rise substantially,” he said.
Still, some analysts are cautious.
“The stock looks expensive on both P/E and P/B metrics. Aegis Vopak is not directly comparable to Adani or JSW, but the stretched valuation does make it a risky bet in both the short and long term,” said Prashanth Tapse, research analyst, senior vice president of research at Mehta Equities.
A closer look also reveals working capital pressure. Aegis Vopak’s debtor turnover ratio, indicating the pace of receivables collection, rose from 72 days in FY23 to 85 days in FY24, and 87 days by year-end.
But Bajaj Broking remains optimistic.
“The marginal increase in debtor days to 87 is within internal thresholds and reflects temporary customer billing cycles rather than any structural issue. The company maintains strict credit controls and sees this as part of the normal working capital rhythm in a B2B storage model.”
Trails peers
Another red flag is the company’s relatively weak return metrics.
In FY24, its net profit margin stood at 15.18%, significantly below Adani Ports (28.73%) and JSW Infrastructure (28.78%). Return on equity (ROE) was similarly modest at 8.68%, compared with 14.86% and 14.1% for its peers.
This indicates weaker operational efficiency and lower value creation for shareholders relative to its competitors.
“The company operates a standalone business focused on liquid and LPG handling, unlike its more diversified peers. This results in lower volumes but relatively higher margins,” Tapse said. “While its PAT (profit after tax) margin has improved, it still remains weaker compared to peers like Adani Ports and JSW Infrastructure,” he added.
SBI Securities also cautioned that despite its lean model, the company’s capital-intensive nature may necessitate future equity or debt raises—posing potential pressure on internal accruals.
Rising energy needs
Still, the broader industry outlook is encouraging.
As India’s economy and energy consumption grow, 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 tonnes (mn MT) in FY09 to 29.7 mn MT in FY24, driven by household penetration and clean cooking fuel initiatives. This is projected to rise to 36-37 mn MT by FY29, implying a 4.5% CAGR over five years. Growing LPG use, especially for cooking and industrial purposes, will boost demand for import-based LPG infrastructure, a key area for Aegis Vopak.
Its promoter, Aegis Logistics, is already one of India’s largest private importers and handlers of LPG, managed via its Singapore-based trading arm.
