AFCONS Infrastructure Ltd, the infrastructure arm of the Shapoorji Pallonji Group, has set the price band for its INR 5,430 crore IPO at INR 440-463 per share. The offering includes a fresh issue of INR 1,250 crore and an offer for sale of INR 4,180 crore. Proceeds will fund capital expenditures, working capital, debt repayment, and general corporate purposes. The IPO opens on October 25 and closes on October 29. AFCONS previously raised INR 2,967 crore from institutional investors in a pre-IPO placement. The company's order book stands at INR 31,747 crore as of June 2024, and it reported a rise in FY24 revenue and profit.
AFCONS Infrastructure Ltd, the infrastructure, engineering, and construction arm of the Shapoorji Pallonji Group, has established the price band for its INR 5,430 crore initial public offering (IPO) at INR 440-463 per equity share. This IPO comprises a fresh issue of up to INR 1,250 crore and an offer for sale of up to INR 4,180 crore.
The proceeds from the fresh issuance are earmarked for various purposes: INR 80 crore for capital expenditure on the purchase of construction equipment, INR 320 crore for funding long-term working capital requirements, INR 600 crore for the prepayment or scheduled repayment of certain outstanding borrowings and acceptances, and the remainder for general corporate purposes. The share sale is set to open for subscription on October 25 and close on October 29.
Earlier this week, AFCONS Infrastructure successfully raised INR 2,967 crore from the company's management, individual investors, and institutional investors during a pre-IPO placement. Notable participants in this pre-IPO book included GIC of Singapore, Enam Holdings, Synergy Capital, 360 One, M&G Investments, Artian Investment from ArcelorMittal, Madhusudan Kela, and White Oak.
The company has undertaken a diverse range of complex and challenging engineering, procurement, and construction (EPC) projects, both within India and abroad. As of June 30, 2024, its order book stood at INR 31,747.43 crore. The company's revenue from operations saw an increase from INR 12,637.38 crore in FY2023 to INR 13,267.50 crore in FY2024. Additionally, profit after tax rose to INR 449.74 crore in fiscal 2024, up from INR 410.86 crore in fiscal 2023.
The IPO size has been adjusted down from an earlier target of INR 7,000 crore due to a lower offer-for-sale component. Nonetheless, Goswami Infratech, the promoter selling shareholder, is increasing its divestment through both a pre-IPO placement and the offer for sale in the IPO, which together totals INR 7,147 crore, surpassing the previously anticipated INR 5,750 crore. Investment bankers have indicated that the pre-IPO placement was conducted to cater to the appetite of institutional investors, with subscriptions from sovereign funds, family offices, and mutual funds.
Goswami Infratech is currently managing a significant debt load and received an extension for a repayment due on its non-convertible debentures (NCDs), which was initially due on September 30. This repayment deadline has now been extended until December 31.
In conclusion, the IPO represents a strategic move for AFCONS Infrastructure, aimed at bolstering its financial position and supporting growth initiatives. With institutional interest already demonstrated, the offering is poised to attract substantial investor participation, reinforcing the company's commitment to delivering complex engineering projects both domestically and internationally.
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