Shapoorji Pallonji Group has set its sights on the capital markets, it’s the group company Afcons Infrastructure will raise INR 7,000 Cr through an IPO. The company has filed preliminary papers or Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) worth INR 7000 Cr.
Fresh Issue and Offer for Sale (OFS)
The proposed IPO comprises of a fresh issue of equity shares worth INR 1250 Cr, alongside an offer for sale (OFS) of INR 5750 Cr, as detailed in the Draft Red Herring Prospectus (DRHP) submitted to SEBI. Promoter entity Goswami Infratech Pvt Ltd will divest approximately INR 5,750 Cr worth of equity shares through the OFS.
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Pre-IPO Placement Consideration
To potentially optimize its fundraising efforts, Afcons Infrastructure is considering a pre-IPO placement round to secure an additional INR 250 Cr. If this placement succeeds, the new issue’s size will be adjusted accordingly.
Utilization of Funds
While maintaining overall budget planning, Afcons Infrastructure reviews the finances of the company that will be acquired through the IPO. The capital outlay is INR 300 Cr, while the long-term working capital requirement is up to INR 350 Cr. Specifically, an amount of INR 500 Cr will be assigned to support and sanctioned borrowings and to take care of some of the outstanding liabilities.
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Valuation and Track Record
Market sources speculate that the IPO could potentially value Afcons Infrastructure between INR 19000 Cr to INR 20000 Cr. The company boasts an impressive track record in executing complex Engineering, Procurement, and Construction (EPC) projects both domestically and internationally.
Robust Order Book and Financial Performance
Afcons Infrastructure is actively engaged in 67 projects across 13 countries, with a substantial order book totalling INR 34888 Cr. Notably, the company has demonstrated robust financial performance, achieving commendable margins for Return on Capital Employed (ROCE) and Return on Equity (ROE) in FY23.
