Afcons Infrastructure, part of the Shapoorji Pallonji Group, is set to launch its initial public offering (IPO) on October 25, with bidding open until October 29. The company aims to raise approximately Rs 5,430 crore through the IPO, which comprises a fresh issue of shares worth Rs 1,250 crore and an offer for sale (OFS) of Rs 4,180 crore by promoter Goswami Infratech. This revised offer size follows a successful pre-IPO fundraising effort that allowed the company to scale back from its original target of Rs 7,000 crore.
Price Band and Lot Size
Afcons Infrastructure has established a price band of Rs 440 to Rs 463 per share. Investors can participate by bidding for shares in lots, with each lot consisting of 32 shares. Therefore, the minimum investment required to enter the IPO is approximately Rs 14,080, based on the lower end of the price band.
Utilization of IPO Proceeds
The Rs 1,250 crore raised through the fresh issue will be allocated as follows:
- Rs 80 crore for purchasing construction equipment to enhance operational efficiency.
- Rs 320 crore for long-term working capital to support large-scale projects.
- Rs 600 crore for debt repayment, aimed at reducing the company’s financial burden.
- The remaining funds will be designated for general corporate purposes.
Ownership Structure and Promoter Information
Currently, the promoter and associated entities hold a 99% stake in Afcons Infrastructure, underscoring strong support from the Shapoorji Pallonji Group. The OFS portion, driven by Goswami Infratech, is a strategic move to diversify ownership and increase market liquidity following the listing.
About Afcons Infrastructure
Afcons Infrastructure is recognized for its strong track record in executing complex engineering, procurement, and construction (EPC) projects both domestically and internationally. The company operates across various sectors, including marine and industrial, surface transport, urban infrastructure, hydro and underground, and oil and gas. In 2023, Afcons was acknowledged as one of India’s top international infrastructure firms by Engineering News-Record (ENR).
Competitive Positioning
In terms of competition, Afcons positions itself against major players such as Larsen & Toubro Ltd (L&T), KEC International Ltd, Kalpataru Project International Ltd, and Dilip Buildcon Ltd. With a well-established reputation and diverse portfolio, Afcons is well-equipped to compete in the infrastructure sector.
Book-Running Lead Managers
To ensure a smooth IPO process, Afcons Infrastructure has appointed several book-running lead managers, including ICICI Securities, DAM Capital Advisors, Jefferies India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets.
As a subsidiary of the Shapoorji Pallonji Group, which was founded in 1865 and has a diversified presence in engineering, construction, infrastructure, real estate, energy, water, and financial services, Afcons Infrastructure is poised to leverage this heritage to solidify its position in the infrastructure market.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. The details regarding the Afcons Infrastructure IPO, including its price band and utilization of proceeds, are subject to change. Potential investors should conduct their own research and consult with a financial advisor before making any investment decisions. The author and the publisher are not liable for any losses or damages arising from reliance on this information.
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