Afcons Infrastructure IPO Day 1 highlights: Issue subscribed 10%. Check latest GMP, subscription status, more.

The initial public offer of Afcons Infrastructure IPO has been subscribed 10% on the first day of subscription today, as per BSE data.

The initial share sale received bid for 86,06,560 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 14% subscription while the quota for non-institutional investors got subscribed 11%. The qualified institutional buyers (QIBs) part is booked 1%. The employee portion has been subscribed 39%.

The initial public offer of Afcons Infrastructure IPO has been subscribed 9% on the first day of subscription today, at 16:24 IST, as per BSE data.

The initial share sale received bid for 81,52,768 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 14% subscription while the quota for non-institutional investors got subscribed 10%. The qualified institutional buyers (QIBs) part is booked 1%. The employee portion has been subscribed 36%.

"With a commitment to quality and efficiency, strengthened by a highly skilled workforce and advanced technology, Afcons is well-positioned to meet the rising global demand for infrastructure development. Given its solid financials and proactive growth strategies, the company is positioned for a favourable valuation .

The IPO is pegged at a PE multiple of 36x. In light of Afcons Infrastructure's robust growth potential, solid financial performance and strategic initiatives aimed at market expansion, we recommend a ‘SUBSCRIBE’ rating for the company," the brokerage said. 

• Marine and industrial undertakings involve facilities such as ports, harbor jetties, dry docks, wet basins, breakwaters, as well as outfall and intake structures, liquefied natural gas tanks, and material handling systems.
• Surface transport initiatives encompass highways, roads, interchanges, mining-related infrastructures, and railways.
• Urban infrastructure endeavors include elevated and underground metro systems, bridges, flyovers, and elevated corridors.
• Hydro and underground projects consist of dams, barrages, tunnels (including large road tunnels), subterranean works, water management, and irrigation systems.
• Oil and gas initiatives involve both offshore and onshore oil and gas operations.

The initial public offer of Afcons Infrastructure IPO has been subscribed 6% on the first day of subscription today, at 14:18 IST, as per BSE data.

The initial share sale received bid for 53,27,424 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 10% subscription while the quota for non-institutional investors got subscribed 5%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 28%.

As of June 30 in both 2024 and 2023, their order book was valued at ₹317,474.27 million and ₹352,402.15 million, respectively. On March 31 of 2024, 2023, and 2022, their order book stood at ₹309,609.90 million, ₹304,057.67 million, and ₹328,048.34 million, respectively.

The order book has played a role in their robust financial results. For the three-month periods ending June 30 in both 2024 and 2023, as well as for the fiscal years 2024, 2023, and 2022, their operational revenue was ₹31,543.60 million, ₹31,714.13 million, ₹132,674.95 million, ₹126,373.82 million, and ₹110,189.66 million, respectively. 

“We believe Afcons Infrastructure Ltd. (Afcons) Ltd IPO brings investors an opportunity to invest in a flagship construction company of the Shapoorji Pallonji Group supported by a strong track record of executing large and complex projects both in India and internationally. We think with a diverse portfolio spanning marine, transportation, bridges and urban infrastructure, Afcons ability to complete projects ahead of schedule highlights its operational excellence. 

Given the company’s advanced equipment base and proven execution capabilities and strategic market position make them a key player in infrastructure sectors. Hence, by looking at all attributes we recommend investors to “SUBSCRIBE” the Afcons Infrastructure Ltd for long term perspective only,” said Rajan Shinde, Research Analyst, Mehta Equities Ltd.

The initial public offer of Afcons Infrastructure IPO has been subscribed 3% on the first day of subscription today, at 13:12 IST, as per BSE data.

The initial share sale received bid for 39,45,888 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 7% subscription while the quota for non-institutional investors got subscribed 4%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 20%.

The brokerage house said that the company is a part of the well-established Shapoorji Pallonji Group and has accomplished numerous renowned infrastructure projects. Strong order book supports future growth and stable financial performance over the years.

Further, the brokerage believes the IPO to be reasonably priced. Long-term prospects look promising, but listing performance may be impacted by current market conditions.

Recommended for long-term investors willing to withstand potential listing volatility.

The initial public offer of Afcons Infrastructure IPO has been subscribed 3% on the first day of subscription today, at 11:42 IST, as per BSE data.

The initial share sale received bid for 28,32,224 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 5% subscription while the quota for non-institutional investors got subscribed 3%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 13%.

• If the company does not qualify for or secure new contracts from project owners, their business, financial health, operational results, future prospects, and cash flows may suffer negatively.
• The company heavily relies on projects granted by government entities or state-owned customers, exposing them to various risks. As of June 30, 2024, such projects accounted for 69.80% of their order book.
• The company’s operations are capital intensive. Should they face inadequate cash flows or be unable to obtain appropriate financing to fulfill working capital needs and repay loans, their business, financial state, and operational results could be negatively impacted.

Over the last eleven financial years and the three-month period ending June 30, 2024, the Company has effectively carried out 79 projects in 17 countries, accumulating a total executed contract value of ₹563.05 billion. As of June 30, 2024, there are 65 active projects in progress across 12 countries, totaling an order book of ₹317.47 billion.

The initial public offer of Afcons Infrastructure IPO has been subscribed 2% on the first day of subscription today, at 10:39 IST, as per BSE data.

The initial share sale received bid for 17,68,544 shares against 8,66,19,950 shares on offer, according to BSE.

The portion for retail investors received 3% subscription while the quota for non-institutional investors got subscribed 2%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion has been subscribed 7%.

As per the red herring prospectus (RHP), the company's listed peers are Larsen & Toubro Ltd (with a P/E of 37.14), KEC International Ltd (with a P/E of 74.67), Kalpataru Project International Ltd (with a P/E of 42.20), and Dilip Buildcon Ltd (with a P/E of 37. 63)

Afcons Infrastructure IPO has book running lead managers including ICICI Securities Limited, Dam Capital Advisors Ltd (formerly known as Idfc Securities Ltd), Jefferies India Private Limited, Nomura Financial Advisory and Securities (India) Pvt Ltd, Nuvama Wealth Management Limited, and SBI Capital Markets Ltd. Additionally, Link Intime India Private Ltd will serve as the registrar for the issue.

Canara Bank Securities Ltd, in its analysis, highlighted that the company boasts a robust and diversified business model, along with a solid order book and stable financial performance in the infrastructure sector. Its key advantages include strategic investments in equipment, although there are challenges such as slim PAT margins and dependency on government capital expenditure. While the management is committed to optimizing long-term asset use, supported by Shapoorji Pallonji, investors should remain cautious about the risks associated with capex reliance and profit margins.

The total amount raised before the IPO stands at ₹2,967 crore, with shares priced at ₹463 each. The total size of the IPO is now set at ₹5,430 crores. The Offer for Sale (OFS) has decreased, while the fresh issue remains unchanged. Afcons Management, along with other companies from the SP Group, has collectively invested ₹38 crore in the fundraise.

Check out marquee investors list: 

• GIC Singapore around ₹756 crs

• Enam Holdings i.e Akash Bhansali – ₹400 crs

• Synergy Capital – ₹400 crs

• 360 One i.e IIFL Wealth – ₹200 crs

• Quant MF –   ₹200 crs

• M&G Investments- ₹175 crs

• Think Investments – ₹175 crs

• Discovery Capital Management – ₹170 crs

• SBI General Insurance – ₹100 crs

• Artian Investment from Arcelor Mittal – ₹100 crs

• Madhu Kela – ₹70 crs

• White Oak- ₹35 crs

• Alchemy i.e Lashit and Neha Sanghvi – ₹30 crs

• Nuvama – ₹25 crs

The IPO includes a fresh issuance of equity shares valued at ₹1,250 crore and a share offer worth ₹4,180 crore by its promoter Goswami Infratech.

Goswami Infratech, Shapoorji Pallonji and Company, Floreat Investments, Hermes Commerce, and Renaissance Commerce are the promoters, holding 99% of the company's shares, while the remaining one percent is owned by public shareholders.

Afcons Infrastructure IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors. A discount of ₹44 per equity share is being offered to eligible employees.

Ahead of its IPO, Afcons Infrastructure Ltd  announced on Thursday that it has secured ₹1,621 crore from anchor investors, just a day before the public subscription for its initial share sale begins.

Participation in the anchor book came from both foreign and domestic institutions, including HDFC Mutual Fund (MF), ICICI Prudential MF, BlackRock, Fidelity Investments, Goldman Sachs, HSBC Group, Nomura, Nippon India MF, Enam Holdings, Mirae MF, Quant MF, Invesco MF, Eastbridge, Amundi, Invesco HK, and SBI General Insurance.

The company has allocated more than 3.5 crore equity shares to 80 different funds at a price of ₹463 per share, which marks the upper limit of the price range.

Afcons Infrastructure IPO GMP today is +60. This indicates Afcons Infrastructure share price was trading at a premium of ₹60 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Afcons Infrastructure share price is indicated at ₹523 apiece, which is 12.96% higher than the IPO price of ₹463.

Based on the last 27 sessions' grey market actions, the current GMP ( ₹60) is indicating a downward trend. According to investorgain.com analysts, the lowest GMP is ₹0, and the highest is ₹225.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.