Everything You Wanted to Know About the Afcons Infrastructure IPO
One of India’s premier infrastructure and engineering companies, Afcons Infrastructure Ltd, has come up with its initial public offering (IPO). The IPO of the engineering major comprises a fresh issue and an offer for sale. If you are looking to invest in the Afcons Infrastructure IPO and are searching for the key details, this blog can be your handy guide.
About Afcons Infrastructure Ltd
Afcons Infrastructure Ltd is the flagship engineering, infrastructure and construction company of the Shapoorji Pallonji Group. With over six decades of track record, Afcons Infrastructure Ltd has executed several challenging and complex engineering projects domestically and internationally. Covering five major industrial verticals, the company has expanded its footprint globally across continents, including Asia, Africa, and the Middle East.
Afcons Infrastructure IPO Details
The table captures the vital details of this IPO:
| IPO Opens On | 25th October |
| IPO Closes On | 29th October |
| Issue Size | Up to ₹ 5430 crores |
| Fresh Issue Size | Up to ₹ 1250 crores |
| Offer for Sale Size | Up to ₹ 4180 crores |
| Price Band | ₹ 440 to ₹463, with a discount of ₹ 44 per share for all eligible employees |
| Face Value | ₹ 10 |
| Bid Size | 32 shares and in multiples thereof |
| Book Value as of June 30, 2024 | ₹ 107.48 |
| Listing On | BSE and NSE |
Use of IPO Proceeds
The company plans to utilise the funds received from the IPO to:
Fund capital expenditure for purchasing construction equipment. An estimated amount of ₹ 800 million has been earmarked for it.
Fund long-term capital requirements. The company plans to use an estimated amount of ₹3200 million towards it.
Prepay or schedule to repay a portion of the company's outstanding borrowings and acceptances. The company proposes to use an estimated amount of ₹6000 million towards it.
IPO Registrar and Book Running Lead Managers
If you have applied for this IPO and wish to check the status of the allotment of your shares, you can do so through the IPO registrar's website. Link Intime India Pvt Ltd is the registrar of the Afcons Infrastructure Ltd IPO. The book running lead managers (BRLMs) consulting which the company has come up with the offer price are:
ICICI Securities Ltd
DAM Capital Advisors Limited
Jefferies India Private Limited
Nomura Financial Advisory and Securities (India) Private Limited
Nuvama Wealth Management Limited
SBI Capital Markets Limited
Offer Structure of Afcons Infrastructure Ltd IPO
Like any other IPO, a fixed quota of shares has been allotted for different categories of investors, including qualified institutional bidders (QIBs), non-institutional bidders and retail investors (see table below):
| Investor Type | Share Allotment |
| Qualified institutional bidders | Up to 50% of equity shares |
| Non-institutional bidders | At least 15% of equity shares |
| Retail investors | At least 35% of equity shares |
Financial Snapshot of Afcons Infrastructure Ltd
Before you open a Demat account and bid for a firm's shares in its IPO, it’s important to have a financial overview of a company to gauge its future growth prospects and understand its profitability. Afcons Infrastructure Ltd boasts of a strong order book with robust financials. The table captures the key financials of the company across different financial years.
| Particulars | FY 24 | FY 23 | FY 22 |
| Total income (in ₹million) | 136468.7 | 128440.9 | 112695.5 |
| Total expenditure (in ₹million) | 119024.8 | 113267.8 | 100829.0 |
| Profit after tax (in ₹million) | 4497.4 | 4108.6 | 3576.1 |
| Total equity and liabilities (in ₹ million) | 162336.4 | 143012.5 | 129737.7 |
| EPS in ₹ | 13.2 | 12.1 | 10.5 |
Competitive Strengths of Afcons Infrastructure Ltd
Afcons Infrastructure Ltd boasts of the following competitive strengths that have helped in its growth over the years:
A robust track record of timely execution of large-scale, complex and high-value projects
A diversified order book across geographies, clients and business verticals
Robust financial performance with long-standing relationships with clients across the globe
An experienced leadership team with the parentage of the Shapoorji Pallonji Group
Strategic equipment base fostering robust execution capabilities
Innovation practices and knowledge management
Risk Factors
Afcons Infrastructure Ltd faces the following risks, which could disrupt its business and impact its bottom line:
Significant dependence on projects awarded by governments and government-owned customers
Risks emerging from interest rate fluctuations, which could reduce the company’s profitability and financial condition
Any termination of projects prematurely could impact its operations
Risks arising in fluctuation of prices of raw materials and overseas projects
In Conclusion
With the Indian construction industry projected to grow at a CAGR of 9.5% to 10% from FY 23 to FY 28, Afcons' experience in executing complex projects coupled with a large order book positions it well to capture the opportunities in the sector.
That said, it's essential for you, as an investor, to ensure the IPO fits into your overall financial goals and be aware of the several risks, the details of which are available in the company's red herring prospectus.
With HDFC SKY, you can easily open a Demat account and participate in this IPO. You can obtain additional funds through margin trading facility if you don't have the required funds. Also, with this demat app, you can invest in various financial instruments, including mutual funds and stocks.
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