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AFCONS INFRASTRUCTURE IPO

14,816
Minimum Investment

Price Range (₹)

Rs. 440 –Rs. 463

Issue Size (₹ in Cr.)

Up to 5430 Cr

Minimum Quantity

32 Shares

Bidding Period

Oct 25 – Oct 29, 2024
  Prospectus Document: Download Now

Subscription Status

Shareholder
Retail Individual Investor
Non-Institutional Investor
Qualified Institutional Buyers
Employee
Overall

About the Afcons Infrastructure IPO

Afcons Infrastructure Ltd IPO: All You Need to Know

Afcons Infrastructure Ltd is one of the leading infrastructure companies in India. With over six decades of experience, the company has been involved in executing several high-profile projects across the globe. Afcons is a part of the Shapoorji Pallonji Group, one of the oldest and most respected business conglomerates in India.

Recently, Afcons Infrastructure Ltd announced its intention to launch an Initial Public Offering (IPO). This article will provide an overview of the company, its financial performance, and key details about its IPO.

Overview of Afcons Infrastructure Ltd

Afcons is well-known for its expertise in engineering and construction. The company focuses on several core sectors, including:

  • Transportation: Highways, bridges, and metros.
  • Marine infrastructure: Ports and harbours.
  • Hydro and tunnelling: Dams and tunnels.
  • Industrial construction: Factories, plants, and large industrial structures.

 

With a presence in over 22 countries and more than 150 completed projects, Afcons has established itself as a global player in the infrastructure sector. The company has delivered iconic projects like the Chenab Railway Bridge in Jammu and Kashmir, the world’s highest railway bridge, and various metro projects across major Indian cities.

Why Is Afcons Infrastructure Ltd Going Public?

Afcons Infrastructure has grown steadily over the years, and now the company seeks to raise funds through its IPO. The funds raised will be used for the following purposes:

  1. Debt Repayment: The company plans to use a portion of the funds to reduce its debt, strengthening its balance sheet and financial stability.
  2. Capital Expenditure: Afcons will also invest in new projects, machinery, and technology to further enhance its operational capacity.
  3. Working Capital: The IPO proceeds will help the company manage its working capital requirements, ensuring smoother project execution and expansion.

 

By going public, Afcons aims to diversify its sources of capital, increase transparency, and boost its brand value in the market.

Financial Performance of Afcons Infrastructure Ltd

Before investing in an IPO, it’s essential to assess the financial health of the company. Below is a summary of Afcons Infrastructure’s financial performance over the last three years:

Financial Summary of Afcons Infrastructure Ltd (in INR Crore)

 

Financial Metrics

31 Mar 2024

31 Mar 2023

31 Mar 2022

31 Mar 2021

Assets

16,233.64

14,301.25

12,973.77

12,489.94

Revenue

13,646.88

12,844.09

11,269.55

9,521.12

Profit After Tax (PAT)

449.76

410.86

357.61

169.91

Net Worth

N/A

3,155.06

2,691.03

2,369.47

Reserves

2,718.55

2,132.55

1,716.85

1,498.40

Total Borrowing

N/A

1,562.82

1,555.2

1,588.59

 

Key Insights from Financial Performance

  • Revenue Growth: The company’s revenue increased from INR 9,521.12 crore in FY 2020-21 to INR 13,646.88 crore in FY 2023-24.
  • Profitability: Profit after tax grew from INR 169.91 crore in FY 2020-21 to INR 449.76 crore in FY 2023-24.
  • Assets: Afcon’s total assets saw significant growth, reaching INR 16,233.64 crore in FY 2023-24.
  • Debt: The company’s total borrowing stood at INR 1,562.82 crore as of FY 2022-23.

 

Industry Overview and Growth Potential

The Indian infrastructure sector is set for rapid growth due to the government’s push for large-scale infrastructure development. India’s National Infrastructure Pipeline (NIP) aims to invest ₹111 lakh crore between 2020 and 2025. This presents a massive opportunity for companies like Afcons, which specialize in core infrastructure areas such as transportation and marine infrastructure.

In addition, global infrastructure development is also picking up pace, especially in emerging markets across Africa and Asia. Afcon’s international experience gives it an edge in tapping into these opportunities.

IPO Details of Afcons Infrastructure Ltd

The IPO of Afcons Infrastructure Ltd is expected to be one of the most anticipated public issues of the year. Here’s what we know about the IPO so far:

  • Issue Size: The total size of the IPO is ₹5,430 crore. This will include both a fresh issue of shares and an offer for sale (OFS) by existing shareholders.
  • Price Band: The price band for the IPO is ₹440 - ₹463
  • Use of Funds: As mentioned earlier, the funds will be used for debt repayment, capital expenditure, and working capital requirements.
  • Listing: The company plans to list its shares on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The listing will happen on 4th Nov.
  • Promoters: The promoters of the company, the Shapoorji Pallonji Group, will continue to hold a significant stake in the company even after the IPO.

 

Should You Invest in Afcons Infrastructure Ltd IPO?

Investing in an IPO requires careful consideration of the company’s fundamentals, the overall market conditions, and future growth potential. Here are some points to consider before making a decision:

Strengths

  1. Strong Market Position: Afcons has a well-established reputation and track record in the infrastructure sector. Its diverse project portfolio and experience across multiple geographies make it a strong player.
  2. Growing Financial Performance: The company’s revenue and profitability have been steadily growing over the past few years, which shows that it is on a positive growth trajectory.
  3. Opportunities in the Infrastructure Sector: With the Indian government’s focus on infrastructure development and the potential for international growth, Afcons is well-positioned to benefit from upcoming opportunities.

 

Risks

  1. High Debt Levels: Despite plans to reduce debt through the IPO, Afcons still has a significant amount of debt on its balance sheet, which could pose a risk if revenue growth slows down.
  2. Cyclical Nature of the Industry: The infrastructure industry is cyclical and depends on government policies, economic conditions, and project availability. Any slowdown in project awards could impact the company’s revenue.
  3. Competition: Afcons faces competition from other major players in the infrastructure sector, both in India and internationally; thus, maintaining a competitive edge will require continued innovation and cost control.

 

Conclusion
Afcons Infrastructure Ltd is a well-established player in the Indian and global infrastructure sectors. Its upcoming IPO offers investors an opportunity to be part of a growing company that is well-positioned to benefit from large-scale infrastructure projects. With a strong financial track record and a promising future, the IPO is likely to attract considerable interest.

However, as with any investment, potential investors should carefully assess the risks and rewards before making a decision. Diversifying your portfolio and considering long-term growth potential can be a good strategy when investing in IPOs like Afcons Infrastructure Ltd.

Follow 3 simple steps TO APPLY IPO

  • lock-in of 3 years
    Select IPO

    Go to the IPO section, select the IPO you want to apply from the list and click on ‘Apply’.

  • lock-in of 3 years
    Fill in the required details

    Fill in the quantity of the number of shares you want to buy. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.

  • lock-in of 3 years
    Confirm your request

    Click on proceed to confirm the order. You can view the placed order under “order book”.

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  • lock-in of 3 years
    Select IPO

    Choose the IPO you want to apply from the list. Click on Apply.

  • lock-in of 3 years
    Fill in the required details

    Fill in the quantity of shares. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.

  • lock-in of 3 years
    Confirm your request

    Check the A/C, UPI details and click on proceed. You will get an UPI link by which payment can be made.

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Afcons Infrastructure IPO FAQs

The lot size for Afcons IPO, is 32 shares and minimum investment required is Rs.14,816 

Afcons IPO issue opens from Oct 25th and closes on Oct 29th, 2024.

The allotment date for Afcons IPO is 30th Oct,2024 and listing date is 4th Nov,2024.

The price band of Afcons IPO is Rs.440 - Rs.463.

The book runners for the Afcons IPO are ICICI Securities Ltd, DAM Capital Advisors Ltd, Jefferies India Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd, Nuvama Wealth Management Ltd, SBI Capital Markets Ltd

Afcons IPO is of issue size up to Rs.5430 Crores

No, you cannot submit for more than one application with a single PAN in Afcons IPO

Visit the pending mandates sections on your UPI App and accept the mandate after which the amount will be blocked. Click here to know more

The objective of Afcons IPO are:

  • Capital expenditure towards purchase of construction equipments
  • Funding long term working capital requirements
  • Prepayment or scheduled repayment of a portion of certain outstanding borrowings and acceptances availed by the company and
  • General corporate purposes
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Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.