Around 11 a.m., the issue received bids for 1,52,34,848 shares, or 18% of the total issue size of 8,66,19,950 shares. The retail portion was subscribed at 25%, while qualified institutional buyers bid for 2,50,944 shares against the 2,45,68,181 shares reserved for them. The allocation for non-institutional investors (NII) was subscribed at 22%.
According to market analysts, the current GMP of Afcons Infrastructure is Rs 20 (4%) in the unlisted market.
The issue, which closes on October 29, is a combination of a fresh issue of shares worth Rs 1,250 crore and an offer for sale (OFS) of up to Rs 4,180 crore by promoter Goswami Infratech.
The company will utilise Rs 80 crore from the fresh issue proceeds to buy construction equipment, Rs 320 crore for long-term working capital, Rs 600 crore to repay debt, and the rest for general corporate purposes.
Afcons Infrastructure IPO price band
The company has fixed a price band of Rs 440-463 per share, where investors can bid for 32 shares in one lot.
Afcons Infrastructure IPO GMP
According to market analysts, the current GMP of Afcons Infrastructure is Rs 20, indicating a premium of 4% to the issue.
Afcons Infrastructure IPO review
Analysts advised investors to subscribe to the issue for the long term as the company boasts of a strong, diversified business model with a solid order book and consistent financial performance in the infrastructure sector.
“Key strengths include strategic equipment investments, but challenges such as low PAT margins and reliance on government capex exist. While management focuses on long-term asset utilization, backed by Shapoorji Pallonji, investors should be aware of risks related to capex dependency and profit margins. We recommend subscribing to this issue for long-term gains,” said Canara Bank Securities.
“Accomplished numerous renowned infrastructure projects. Strong order book supports future growth. Stable financial performance over the years. IPO is reasonably priced. Long-term prospects look promising, but listing performance may be impacted by current market conditions,” said Swastika Investmart.
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Other details
Afcons Infrastructure has a proven track record of successfully delivering a wide range of complex and challenging engineering, procurement, and construction (EPC) projects both domestically and internationally. According to the Fitch Report, Afcons is recognized as one of India’s leading international infrastructure firms, as per the 2023 rankings by Engineering News-Record (ENR) based on international revenue for the financial year 2023.
The company operates across five major infrastructure business verticals including marine and industrial, surface transport, urban infrastructure, hydro and underground, and oil and gas.
Founded in 1865, Shapoorji Pallonji Group (SP Group) is a diversified group and has a leading presence in engineering & construction, infrastructure, real estate, water, energy and financial services sectors across the globe.
In terms of listed industry peers, Afcons compares itself with Larsen & Toubro Ltd (L&T), KEC International Limited (KEC), Kalpataru Project International Ltd (KPIL), and Dilip Buildcon Ltd
(DBL).
For the year ending March 2024, the company’s revenue from operations fell marginally to Rs 3,154 crore and the profit after tax rose to Rs 91.6 crore from Rs 90.9 crore a year ago.
ICICI Securities, DAM Capital Advisors, Jefferies India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets are the book-running lead managers to the issue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)