Shapoorji Pallonji group’s Afcons Infrastructure IPO enters Day 2

The initial public offering of Afcons Infrastructure, flagship infrastructure, engineering, and construction company of the Shapoorji Pallonji group, enters day 2. The IPO saw a muted response on Friday. 

The ₹5,430-crore IPO consists of a mix of fresh issues of up to ₹1,250 crore and an offer of sale of up to ₹4,180 crore by the promoter. The price band has been determined at ₹440 – ₹463 a share. Investors can bid for a minimum of 32 equity shares and in multiples of 32 equity shares thereafter. 

As against 8.66 crore shares on offer (net off anchor portion), the IPO received bids for 86 lakh shares.

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The offer is being made through the book-building process, wherein not more than 50 per cent of the net offer will be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15 per cent to non-institutional bidders, and not less than 35 per cent to retail individual bidders. It has a reserved portion for employees. A discount of ₹44 per equity share is offered to eligible employees bidding in the employee reservation portion.

While the portion reserved for retail investors was subscribed 0.14 times, HNIs 0.11 times, and QIBs 0.01 times, the portion reserved for employees was undersubscribed at 0.39 times.

Afcons Infrastructure has raised ₹1,621 crore from anchor investors ahead of its initial public offering. The company said it allocated 35,021,597 equity shares at ₹463 per share on Thursday to anchor investors. 

Foreign and domestic institutions that participated in the anchor were GIC, HDFC MF, ICICI Pru AMC, BlackRock, Fidelity Investments, Goldman Sachs, HSBC Group, Nomura AM, Nippon MF, Fullerton, Enam Holdings, Birla MF, Mirae MF, Quant MF, Invesco MF, Eastbridge, Amundi, Invesco HK, Loomis & Sayles, HDFC Life, 360 One AIF, Manulife, Mirae Global, WhiteOak (MF), WhiteOak, BNP Baroda MF, LIC MF, BCI, Jupiter AM, NS Partners, ICICI Pru Life, Abakkus, Oaktree, Think Investment, Helios MF, Mahindra, Trust MF, Edelweiss Life, Carnelian, Allspring, Birla Offshore, MK Ventures, Jain Global, Jane Street, PIMCO, SBI General Insurance, Nuvama Crossover fund, GAM Investment UK, Neuberger, Taurus MF, ITI MF, Nippon Life, Verition, and Zeta Global Funds (OEIC) PCC - Zeta Series B Fund PC.

Out of the total allocation, 11,710,136 equity shares were allocated to 15 domestic mutual funds through a total of 31 schemes amounting to ₹542.2 crore contributing 33.44 per cent of the total anchor book size.

The proceeds from its fresh issuance will be used to the extent of ₹80 crore for capital expenditure towards the purchase of construction equipment, ₹320 crore for funding long-term working capital requirements, ₹600 crore for prepayment or scheduled repayment of a portion of certain outstanding borrowings, and acceptances availed by the company, and general corporate purposes.

Afcons operates across five major infrastructure business verticals: Marine and Industrial, encompassing projects such as ports, harbours, dry docks, LNG tanks, and material handling systems; Surface transport, including highways, interchanges, mining infrastructure, and railways; Urban infrastructure, covering metro works, bridges, flyovers, and elevated corridors.; Hydro and Underground, comprising dams, tunnels, and water-related projects; and Oil and Gas, involving offshore and onshore projects in the oil and gas sector.

ICICI Securities Limited, DAM Capital Advisors Limited, Jefferies India Private Limited, Nomura Financial Advisory and Securities (India) Private Limited, Nuvama Wealth Management Limited, and SBI Capital Markets Limited are book running lead managers, and Link Intime India Private Limited is the registrar of the issue.