Shapoorji Pallonji's Afcons Infra Share Price Closes At 2% Premium Over IPO Price

Afcons Infrastructure Ltd.'s share price closed at Rs 472.60 on the National Stock Exchange, a premium of 2.07% over the issue price of Rs 463 apiece. The stock closed at Rs 472.50 per share on the BSE, marking a premium of 2.05%.

The Rs 5,430 crore initial public offering of the infrastructure firm was subscribed 2.63 times on the final day of bidding led by non-institutional investors.

Qualified institutional buyers subscribed 3.79 times, non-institutional investors bid 5.05 times, retail investors subscribed 94% and employees subscribed 1.67 times in their IPO allotment.

Afcons Infrastructure IPO price band was set between Rs 440 and Rs 463 per share.

The issue price is set by BRLMs based on extensive feedback, according to Managing Director Paramasivan Srinivasan. The company is priced roughly at cash profit level at a one-third discount to Larsen & Toubro Ltd. and at Ebitda level at 50% discount to L&T, Srinivasan said. "We believe it has a definitive upside possibility for investors."

"The listing would give us a few advantages, like the corporate governance which was confined within will be known to the outside world, Srinivasan said. Second, it is perceived that a listed entity has better corporate governance than an unlisted entity. From that perspective, it creates a perceptional shift and this could significantly help international markets," he said.

The Shapoorji Pallonji Group's company raised Rs 1,621.5 crore from anchor investors by allotting 3.5 crore shares at Rs 463 apiece to 80 anchor investors.

The offer size has been reduced following a pre-IPO fundraising. In the March draft papers, the company had initially planned to raise Rs 7,000 crore through the initial share sale.

ICICI Securities Ltd., DAM Capital Advisors Ltd., Nuvama Wealth Management Ltd., Jefferies India Pvt., Nomura Financial Advisory and Securities (India) Pvt. and SBI Capital Markets Ltd. were the leading bookrunners for the issue.

The infrastructure firm aims to utilise the net proceeds received from the fresh issue towards funding long-term working capital requirements, repaying certain outstanding borrowings and for other general corporate activities.

Afcons Infrastructure is a part of the Shapoorji Pallonji Group that specialises in engineering and construction. Afcons operates in various infrastructure sectors, including marine, surface transport, urban infrastructure, hydro and underground, and oil and gas projects.

The company has completed projects in more than 25 countries across Asia, Africa, and the Middle East. Its work includes building large structures with creative designs and full construction services. The firm has also delivered over 350 infrastructure projects.