Afcons Infrastructure, the flagship infrastructure engineering and construction company of the Shapoorji Pallonji Group, is set to make waves in the market with its upcoming Initial Public Offering (IPO). With a legacy spanning over six decades, Afcons has built a reputation for executing complex and challenging EPC (Engineering, Procurement, and Construction) projects both domestically and internationally. This IPO is expected to raise ₹5,430 crores, consisting of a Fresh Issue of 269.97 lakh shares worth ₹1,250 crores and an Offer for Sale of 902.80 lakh shares totaling ₹4,180 crores.

IPO Details

The subscription period for the Afcons Infrastructure IPO opened on October 25, 2024, and will close on October 29, 2024. The allotment is anticipated to be finalized on or about October 30, 2024, with shares scheduled to be listed on the BSE and NSE around November 4, 2024.

Investors will find the share price band set between ₹440 and ₹463 per equity share. At the upper end of the price band, the market capitalization of Afcons Infrastructure is estimated at ₹17,026 crores. The minimum lot size for retail investors is 32 shares, requiring an investment of approximately ₹14,816. High-Net-Worth Individuals (HNIs) will need to invest in at least 14 lots (448 shares), totaling ₹2,07,424.

Financial Highlights

Afcons Infrastructure has demonstrated robust financial performance in recent years. The revenues from operations for the three-month period ended June 30, 2024, were ₹32,134.70 million, with total revenues for fiscal years 2024, 2023, and 2022 recorded at ₹1,36,468.74 million, ₹1,28,440.90 million, and ₹1,12,695.49 million, respectively. The company reported an EBITDA of ₹3,716.93 million for the same three-month period, highlighting its operational efficiency.

Moreover, the company's Profit After Tax (PAT) figures were ₹915.86 million for the three-month period ended June 30, 2024, and ₹4,497.38 million for fiscal year 2024. These strong performance indicators underline Afcons’ ability to generate significant profits while managing its operational costs effectively.

Investment Considerations

The company’s pre-issue EPS (Earnings Per Share) stands at ₹13.20, while the post-issue EPS is expected to be ₹12.22. The pre-issue P/E (Price-to-Earnings) ratio is calculated at 35.08x, with a post-issue P/E of 37.88x, compared to an industry P/E ratio of 47.91x. The Return on Capital Employed (ROCE) for FY24 is 20.18%, and the Return on Equity (ROE) is 13.28%, indicating that Afcons Infrastructure is performing well against its peers.

The Grey Market Premium (GMP) for Afcons Infrastructure is currently projected at ₹87, suggesting potential listing gains of approximately 19% upon listing. However, it's important to note that trading in the grey market does not reflect actual trading on the stock exchange and should be approached with caution.

Subscription Status and Anchor Investors

As of 7:00 PM on October 29, 2024, the Afcons Infrastructure IPO has been subscribed 2.63 times on its final day of the subscription period, indicating strong interest from investors. The company has also successfully raised ₹1,621.49 crores from Anchor Investors, allocating 3,50,21,597 equity shares at the upper price of ₹463 per share, further demonstrating confidence in the company’s growth prospects.

Allotment Process

The allotment date for the Afcons Infrastructure IPO is set for October 30, 2024. Investors can check their allotment status by navigating to the IPO allotment status page and selecting Afcons Infrastructure from the dropdown list. They will need to provide their application number, PAN, or DP Client ID to access their status.

Utilization of IPO Proceeds

The proceeds from the fresh issue will be directed towards various objectives, including:

1. ₹800 million for capital expenditure related to the purchase of construction equipment.
2. ₹3,200 million for funding long-term working capital requirements.
3. ₹6,000 million for prepayment or scheduled repayment of outstanding borrowings.
4. General corporate purposes.

Conclusion

In summary, the Afcons Infrastructure IPO presents a compelling investment opportunity for those looking to invest in a well-established player within the infrastructure sector. Given the company’s solid financial performance, fair pricing, and potential for listing gains, it is recommended that only risk-tolerant investors consider applying for this IPO, whether for potential short-term listing gains or long-term investment.

For more insights into the stock market and investment opportunities, explore our other articles. Join our Trading with CA Abhay Telegram Channel for regular stock market trading and investment calls by CA Abhay Varn, a SEBI-registered research analyst. Also, stay updated with market news by joining our Finance Saathi Telegram Channel.

To embark on your stock market journey, consider applying in IPOs by opening a free demat account with Choice Broking FinX.

Stay informed with the latest IPO and market news by visiting Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance Saathi.