Afcons Infrastructure, part of the Shapoorji Pallonji Group, launched a Rs 5,430 crore IPO on October 25, closing on October 29. Priced at Rs 440–Rs 463 per share, it offers retail and HNI options. Analysts suggest “Subscribe – Long Term” amid strong fundamentals, though caution on PAT margins and capex dependencies.
Afcons Infrastructure Limited, a Mumbai-based infrastructure company and part of the Shapoorji Pallonji Group, has announced an initial public offering (IPO) of Rs 5,430 crore, which opened for subscription on October 25 and it will end on October 29. The IPO consists of a fresh issue of 2.7 crore shares, raising Rs 1,250 crore, and an offer for sale of 9.03 crore shares, worth Rs 4,180 crore.
The price range for the IPO is Rs 440 to Rs 463 per share, with individual investors needed to invest at least Rs 14,816 for a lot size of 32 shares. The minimum application requirements for high-net-worth individual (HNI) investors are 14 lots (448 shares) at Rs 207,424 for small HNIs and 68 lots (2,176 shares) at Rs 1,007,488 for large HNIs. Employees can reserve up to 596,659 shares at a discount of Rs 44 per share.
As per multiple websites that track the grey market premium activities, the shares of Afcons Infrastructure IPO are commanding a GMP in the price range of Rs 50 – Rs 60 in the unlisted market.
According to the Anand Rathi research report, “At the upper band company is valuing at 37.9x its FY24 earnings along with being valued at 46.3x if we annualize FY25 earnings. Following the issuance of equity shares, the company’s market capitalization stands at ₹1,70,261.8 million, with a market cap-to-sales ratio of 1.34 based on its FY24 earnings. We believe that the issue is fully priced and recommend “Subscribe – Long Term” rating to the IPO.”
According to the Canara Bank Securities report, “the company struggles to deliver strong PAT margins compared to EBITDA margins due to strategic equipment purchases, indicating steady financial performance with gradual margin expansion despite its capital-intensive nature. The company has a strong, diversified business model with a solid order book and consistent financial performance in the infrastructure sector. Key strengths include strategic equipment investments, but challenges such as low PAT margins and reliance on government capex exist.”
The report added, “While management focuses on long-term asset utilization, backed by Shapoorji Pallonji, investors should be aware of risks related to capex dependency and profit margins. We recommend SUBSCRIBE to this issue for long-term gains.”
