According to the draft red herring prospectus (DRHP), the offering consists of a fresh issue of up to ₹1,250 crore and an offer for sale (OFS) of up to ₹5,750 crore by the promoter, Goswami Infratech. Sources said the promoters are considering selling more shares worth ₹7,150 crore. Afcons did not respond to ET’s queries.
The company plans to use the proceeds from the fresh issue for capital expenditure on construction equipment, funding long-term working capital needs, and prepaying borrowings.
Afcons Infra’s IPO to Open Early Oct
ICICI Securities, DAM Capital, Jefferies India, Nomura, Nuvama, and SBI Capital are the book-running lead managers for the issue.
This would be the second public issue from Shapoorji Pallonji Group, the privately-held conglomerate headed by Shapoor Mistry. In August 2019, Sterling & Wilson Solar, the group’s solar power engineering and EPC company, raised around ₹3,125 crore through IPO.
The group owns an 18.6% stake in the Tata Group’s holding company, Tata Sons.Afcons, a EPC (engineer ing, procurement, and construction) projects company, posted a 15% increase in revenue for the year ended March 31, 2023, to ₹12,637 crore. Its operating profit surged 28% to ₹1,517 crore, and the company recorded a net profit of ₹411 crore for FY23, according to the DRHP.As of September 30, 2023, Afcons had an order book of ₹34,888 crore, with over 68% of its orders coming from the government sector.
Bankers said the strong appetite for IPOs is encouraging companies with bigger fund raising plans to hit the primary market. The ₹6,560 crore public issue of Bajaj Housing Finance, the largest IPO so far this year, was subscribed 64 times earlier this month, attracting bids amounting to a record ₹3.23 lakh crore. The other major IPO this year, Ola Electric’s ₹6,146 crore public issue, was subscribed more than 4 times last month.
So far this year, around 60 companies have raised approximately ₹65,000 crore through IPOs, compared to ₹49,435 crore raised by 57 companies in 2023, according to Prime Database.