Afcons Infrastructure Limited’s highly anticipated IPO has set a fundraising target of Rs 5,430 crore, broken down into a fresh issue of 2.7 crore shares totaling Rs 1,250 crore and an offer for sale of 9.03 crore shares, amounting to Rs 4,180 crore. The IPO opened on Friday, but interest has been relatively subdued in initial bidding. By the close of October 25, 2024, subscription levels showed a modest overall rate of 0.14 times. Individual retail investors led with a subscription rate of 0.15 times, demonstrating a degree of enthusiasm. However, qualified institutional buyers (QIB), which include major financial entities and funds, exhibited a more cautious approach with a subscription rate of 0.11 times. Non-institutional investors (NII), often comprising high-net-worth individuals and companies, subscribed at a rate of 0.12 times, suggesting limited demand from this segment of the market.
The price band for the IPO is set between Rs 440 and Rs 463 per share, with a minimum application lot size of 32 shares. With the latest grey market premium (GMP) as of October 25 at Rs 33, the implied listing price for Afcons Infrastructure shares could reach approximately Rs 496, indicating a potential 7.13% gain over the upper price band. The IPO remains open until October 29, 2024, providing further opportunity for investors to participate.
Financial experts have largely assigned a “Subscribe” recommendation for long-term investors. Geojit Financial Services points to Afcons' wide-ranging geographic operations, diversified sector presence, and solid order book as risk-mitigating strengths. They note that the company's robust project completion record and reputation in the infrastructure domain position it well for steady growth. Rajan Shinde from Mehta Equities highlights Afcons' extensive equipment capabilities and proven track record in high-stakes infrastructure projects, underscoring their strategic value in this sector and recommending the IPO specifically for medium- to long-term investments.
The IPO allotment is expected to be finalized on October 30, 2024, with shares set to debut on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on November 4, 2024. This listing could mark an important milestone for Afcons as it expands its capital base, further positioning itself within India’s rapidly growing infrastructure market, especially amid increasing governmental and private sector investments in infrastructure development across sectors such as transportation, urban development, and energy. The company’s proven expertise in complex projects and its strategic position in the industry continue to generate significant interest, making this IPO a compelling opportunity for investors seeking exposure to India's infrastructure boom.
