Afcons Infrastructure IPO: Check Subscription Status, Latest GMP; Should You Bid?

The initial public offer (IPO) of Afcons Infrastructure has finally opened for Subscription on Friday, September 25, 2024. The issue will close on October 29 and has been proposed to be listed on BSE and NSE. The issue includes a fresh issue of shares worth Rs 1250 crore along with an offer for sale (OFS) of approximately 4180 crore by its promoter Goswami Infratech. The allotment for Afcons Infrastructure IPO is likely to finalised on October 30, 2024. The tentative listing date on the bourses is November 4, 2024.

GMP Details: As per details available, Afcons Infrastructure IPO last GMP stood at Rs 50 (as on Oct 25, 2024 at 10:30 am). With the price band of 463.00, Afcons Infrastructure IPO's likely listing price is Rs 513 (cap price plus latest GMP). The likely percentage gain/loss per share is 10.80%, according to Investorgain. GMP or grey market premium relies on market sentiments and it keeps fluctuating. 'Grey market premium' reflects investors' willingness to pay more than the issue price.

Lead Managers of Afcons Infrastructure: ICICI Securities, Jefferies India, DAM Capital Advisors, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets will reportedly be the book-running lead managers to the issue.

Where The IPO Proceeds Will Be Used? The company plans to use Rs 80 crore from the fresh issue proceeds to purchase the construction equipment while Rs 320 crore will be used for long-term working capital, Rs 600 crore will be used for repayment of debt, and the remaining will be used for general corporate purposes.

Price Band Of The Public Issue: The price band of the Rs 5430-crore IPO has been set between Rs 440 and Rs 463 per equity share for the public issue.

Afcons Infrastructure's retail quota has reportedly been subscribed by 0.04 times so far and non-institutional investor (NII) category received 0.02 times subscription.

Analysts Recommendations: Rajan Shinde, Research Analyst, Mehta Equities Ltd said, "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. We also believe The company's robust order book and long-standing relationships with global clients like Arcelor Mittal and Reliance Industries provide strong revenue visibility. AIL's strategic push into high-growth international markets such as Africa, Southeast Asia, and Eastern Europe, combined with its expertise in leveraging innovative construction methodologies, positions it well for sustained growth."

By looking at the financials, the company posted respectable growth in revenue from operations and net profit at 14.7% and 14.9% in FY2023 and a modest growth of 5% and 9.5%, respectively, in FY2024. On valuation parse at the upper price band of Rs.463/-, the issue is asking for a market cap of Rs.17029 cr and based on FY 2025e annualised earnings and fully diluted post IPO paid-up capital, the company is asking for a PE of 46.48x which seems fully priced by looking at the industry average of ~40-45x. Investors should also look at IPO offers which come with nearly 77% OFS i.e Rs.4180/- cr with total issue of Rs.5430 cr which is an area of concern for new investors. 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, added Rajan Shinde.