Afcons Infrastructure IPO to debut on the bourses on November 4; Here’s what GMP, experts indicate ahead of listing

Afcons Infrastructure IPO listing date has been scheduled for Monday, November 4. Afcons Infrastructure IPO allotment was finalised yesterday (Thursday, October 31) although the allotment process started a day before. For those who have been allocated shares, the crediting of shares to demat accounts and the process of refunding those who have not yet received their shares would have finished yesterday itself.

The Afcons Infrastructure IPO commenced for subscription on Friday, October 25, and concluded on Tuesday, October 29. According to BSE data, Afcons Infrastructure IPO subscription status on the final bidding day stood at 2.63 times.

The retail investor segment achieved a subscription rate of 94%. Non-institutional investors subscribed at a rate of 5.05 times, while qualified institutional buyers (QIBs) reserved portion was booked at 3.79 times. The employee segment saw a subscription of 1.67 times.

The IPO faced challenges during the first two days of bidding. On the second day of the share offering, the subscription for the Afcons Infrastructure IPO had reached 36%. On the inaugural day of bidding, the Afcons Infrastructure IPO was subscribed at only 10%. Afcons Infrastructure disclosed on Thursday that it raised ₹1,621 crore from anchor investors.

The Afcons Infrastructure IPO allocated 50% of the shares in the public offering for QIB, 15% for non-institutional investors, and 35% of the offering is designated for retail investors. Eligible employees were offered a discount of ₹44 per equity share. The price band for the Afcons Infrastructure IPO was set between ₹440 and ₹463 per equity share, with a face value of ₹10, and the lot size for the Afcons Infrastructure IPO was 32 equity shares, with additional shares being issued in multiples of 32 thereafter.

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities highlighted that Afcons Infrastructure faced challenges during the first two days of bidding but sailed through on the final day of bidding and received very decent subscription demand mainly supported by NII category investors who bid for 5.3x to the allotted offer size. The retail portion was undersubscribed which means everyone will get their demanded shares at cut-off price.

"The decent demand supply of Afcons Infrastructure IPO may be due to the OFS offer by parent company of Afcons Infrastructure as they are going through a challenging phase marked by significant debt and family business restructuring. The fund raised will help the parent better manage obligations, debt crisis in the other group companies. This objective was a hurdle for short term investors to bid aggressively.

Considering all the parameters lower than expected subscription figures and parent credit weightage followed by ongoing subdued market mood, Listing would be flat 5% + or – to its issue price. There is a high possibility of negative listing, which can be an opportunity for long term investors to accumulate more on day one of listings," added Tapse.

Afcons Infrastructure IPO GMP today

Afcons Infrastructure IPO GMP (grey market premium) today is 1. This indicates Afcons Infrastructure share price was trading at a premium of ₹1 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current discount in the grey market, the estimated listing price of Afcons Infrastructure share price is indicated at ₹464 apiece, which is 0.22% higher than the IPO price of ₹463.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Afcons Infrastructure IPO details

The IPO includes a fresh issuance of equity shares valued at ₹1,250 crore and a share offer worth ₹4,180 crore by its promoter Goswami Infratech.

Goswami Infratech, Shapoorji Pallonji and Company, Floreat Investments, Hermes Commerce, and Renaissance Commerce are the major shareholders, collectively owning 99% of the company's shares, while the remaining 1% is held by public investors.

The company intends to utilise ₹80 crore from the fresh issue proceeds for acquiring construction equipment and ₹320 crore for long-term working capital needs. Additionally, the company plans to allocate ₹600 crore for repaying debt, with the rest of the IPO funds designated for general corporate purposes.

Afcons Infrastructure IPO has book running lead managers including ICICI Securities Ltd, Dam Capital Advisors Ltd (formerly known as Idfc Securities Ltd), Jefferies India Private Limited, Nomura Financial Advisory and Securities (India) Pvt Ltd, Nuvama Wealth Management Limited, and SBI Capital Markets Ltd. Additionally, Link Intime India Private Ltd will serve as the registrar for the issue.

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