Afcons Infrastructure IPO October 25 Highlights: On Day 1, public offer subscribed 0.10 times, GMP drops

On Day 1, public offer of Afcons Infrastructure IPO was subscribed 0.10 times even as GMP dropped to Rs 33.

India’s forex stands at $688.3 billion as of Oct 18, down $2.2 billion from last week

As per investorgain.com, the latest GMP for Afcons Infrastructure IPO stands at Rs 33. With a price band set at Rs 463, the estimated listing price for the IPO is Rs 496 (based on the cap price plus today's GMP). This implies an expected gain of 7.13% per share.

The limit of Mudra loans under the Pradhan Mantri Mudra Yojana (PMMY) has been enhanced from current Rs. 10 lakh to Rs. 20 lakh. This increase aspires to further the overall objective of the Mudra Scheme which is Funding the Unfunded. This enhancement is specifically beneficial to upcoming entrepreneurs facilitating their growth and expansion. The move is in alignment with the Governmment’s commitment in fostering a robust entrepreneurial ecosystem.

• Bharti Airtel lost 24 lakhs
• VodafoneIdea lost 18 lakh
• Reliance Jio lost 40 lakh subscribers
• While BSNL added 25 lakhs new subscribers.

• The World Bank is holding talks with Turkey to increase financing to Ankara beyond the $35 billion it has already provided through 2028, a source with knowledge of the matter said.
• A "further increase" on the $35 billion is expected, the person told Reuters, declining to be named as the discussions are confidential.
• The World Bank and Turkey's treasury and finance ministry did not respond to a request for comment. (Reuters)

The European Union and China have agreed to hold further technical negotiations shortly on possible alternatives to tariffs on China-built electric vehicles, the European Commission said on Friday. "The principals agreed that further technical negotiations would take place shortly", the Commission said after a video call EU trade chief Valdis Dombrovskis and Chinese Minister of Commerce Wang Wentao. Last week, European Commission chief Ursula von der Leyen said the EU wants a level playing field with China on car tariffs and that it is negotiating with Beijing mechanisms such as price commitments or investments in Europe as an alternative to tariffs. (Reuters)

The Department for Promotion of Industry and Internal Trade (DPIIT) has announced a strategic partnership with HCLSoftware, a global leader in software solutions, as part of its Manufacturing Incubation Initiative at Vanijya Bhawan, New Delhi. This initiative aims to transform India’s startup manufacturing ecosystem by fostering an environment where corporate entities play a key role in supporting and incubating manufacturing startups. As part of the Startup India program, DPIIT has signed over 80 Memorandums of Understanding (MoUs) with industry stakeholders to date.

• Qualified Institutional Buyers (QIBs) - 0.00 times
• Non Institutional Investors(NIIS) - 0.03 times
• Retail Individual Investors (RIIs) - 0.06 times
• Employee Reserved - 0.15 times
• Total - 0.04 times

Afcons Infrastructure is the leading infrastructure, engineering, and construction company within the Shapoorji Pallonji Group. In FY24, its revenue composition included 72.37% from EPC projects, 27.38% from item-rate projects, and 0.25% from cost-plus projects.

• Brokerage firm KR Choksey has issued a 'Subscribe' rating for Afcons Infrastructure’s IPO, highlighting the company’s strong position for long-term growth within the infrastructure sector. With extensive experience in handling complex engineering, procurement, and construction projects, Afcons is poised to capitalize on sector opportunities effectively.
• KR Choksey notes that Afcons’ solid financial standing and proactive growth strategies contribute to an attractive valuation, with the IPO priced at a P/E multiple of 36x. Given Afcons Infrastructure’s promising growth prospects, strong financial performance, and strategic market expansion plans, KR Choksey recommends subscribing to the IPO.

Afcons Infrastructure plans to use the net proceeds from the public issue for capital expenditure on purchasing construction equipment and funding long-term working capital needs. Additionally, the proceeds will be utilized for the prepayment or scheduled repayment of a portion of certain outstanding borrowings and acceptances, as well as for general corporate purposes.

Assigning a 'subscribe' rating to the public offer, Sagar Shetty, Research Analyst at StoxBox, stated, "The company demonstrated strong financial growth between FY22 and FY24, with a revenue CAGR of 9.7%, EBITDA growth of 20.8%, and a PAT increase of 12.1%. For FY24, EBITDA and PAT margins were 10.3% and 3.4%, respectively, while Q1FY25 saw margins of 11.2% and 2.9%. The company maintained a healthy ROE of 12.5% and an ROCE of 13.7% in FY24. It is valued at a P/E ratio of 35.1x on the upper price band based on FY24 earnings, which is lower than the industry average. With its strong market position, the company is well-positioned to capitalize on emerging opportunities. Therefore, we assign a "SUBSCRIBE" rating to the issue for medium to long-term investors."

"Its diversified operations cover sectors such as marine, industrial, surface transport, urban infrastructure, hydro and underground, as well as oil and gas. AIL’s growth is driven by its leadership, supported by the Shapoorji Pallonji group’s 150 years of expertise. The IPO is valued at a 36.1x/37.9x P/E multiple of FY24 consolidated earnings, based on the price bands of Rs 440 and Rs 463. Given its strong brand presence and a robust, diversified order book, we recommend applying for the IPO as a medium to long-term investment," Mahesh M Ojha, AVP — Research at Hensex Securities further added.

Assigning a 'buy' rating to the public issue, Mahesh M Ojha, AVP — Research at Hensex Securities, stated, "Afcons Infrastructure Ltd. (AIL), a leading company of the Shapoorji Pallonji group, has established expertise in complex EPC project execution on a global scale. As of June 2024, AIL’s order book is valued at ₹31,747 crore across 65 projects in 12 countries, with an order book-to-sales ratio of 2.52x. The company has recently secured orders worth ₹5,936.7 crore and holds the L1 position for ₹10,732.4 crore. Over 11 years, AIL has executed 79 projects in 17 countries, totaling Rs 56,305 crore."

The public offering is planned for listing on the BSE and NSE, with the Afcons Infrastructure IPO likely to debut on November 4, 2024, as the stock market will be closed on November 1 for Diwali.

ICICI Securities, DAM Capital Advisors, Jefferies India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets have been appointed as the lead managers for the book-built offer.

The share allocation is expected to take place on October 30, 2024.

Bidders can apply in lots, with each lot of the book-built issue consisting of 32 company shares.

The company aims to raise Rs 5,430 crore through this public issue, which will consist of a mix of fresh issues and an offer for sale (OFS).

Shares of Afcons Infrastructure Limited are available in the grey market today, ahead of the IPO subscription opening. According to stock market observers, the shares are trading at a premium of Rs 76 in the grey market.

The company has set the Afcons Infrastructure IPO price band between Rs 440 and Rs 463 per equity share. The book-built issue is planned to be listed on both the BSE and NSE.

Afcons Infrastructure, the flagship infrastructure engineering and construction company of the diversified Shapoorji Pallonji Group, has scheduled its IPO from October 25, 2024, to October 29, 2024.

Afcons Infrastructure's initial public offering will open for subscription today (October 25) and will close on October 29. The allotment for the Rs 5,430-crore IPO is likely to be finalised on October 30 and listing is expected on November 4.

The price band for the issue has been set at Rs 440 to Rs 463 per share.

Shapoorji Pallonji Group's flagship infrastructure engineering and construction firm said it has mobilised Rs 1,621 crore from anchor investors on Thursday, a day before its initial share sale opening for public subscription. The company has allocated over 3.5 crore equity shares to 80 funds at Rs 463 apiece, which is also the upper end of the price band.