Afcons Infrastructure Ltd has submitted its draft red herring prospectus (DRHP) to the Securities Exchange Board of India (Sebi), looking to raise Rs 7,000 crore through its initial public offer (IPO).
The construction and engineering firm which is a part of the Shapoorji Pallonji Group filed its papers for the IPO on Friday, reported Moneycontrol.
Afcons Infrastructure plans to raise Rs 1,250 crore by issuing new shares and Rs 5,750 crore through the sale of existing shares.
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The majority of the existing shares, around Rs 5,750 crore worth, will be sold by Goswami Infratech Pvt Ltd, as mentioned in the DRHP.
As of December 2023, Goswami Infratech Pvt Ltd holds a 72.35 percent stake in Afcons, while Shapoorji Pallonji and Company holds 16.64 percent, mentioned in the report.
The funds raised from the IPO will be allocated for various purposes. This includes Rs 150 crore for capital spending, Rs 350 crore for long-term working capital needs, and Rs 500 crore for repaying a portion of the company’s outstanding loans, which amounted to Rs 2,887.59 crore as of December 2023.
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Leading financial institutions such as ICICI Securities, DAM Capital, Nomura, Jefferies, and SBI Capital will manage the IPO.
The valuation of Afcons Infra is estimated to be between Rs 19,000-20,000 crore for the IPO launch, according to CNBC-TV18.
Afcons Infrastructure, headquartered in Mumbai and backed by the Shapoorji Pallonji Group, is engaged in various infrastructure projects both in India and internationally. Their projects range from building viaducts, flyovers, metros, and bridges to pipelines, highways, ports, barrages, and oil and gas projects.
The Shapoorji Pallonji Group, established in 1865, has diversified interests in Engineering & Construction, Infrastructure, Real Estate, Water, Energy, and Financial Services sectors.
Afcons Infrastructure has a solid track record in executing complex projects, having completed 76 projects across 15 countries over the past ten financial years with a total historic executed contract value of Rs 52,200 crore.
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Currently, the company has 67 active projects across 13 countries, with an order book of Rs 34,888 crore. This includes a domestic order book of Rs 26,093 crore and an overseas order book of Rs 8,795.32 crore.
In FY23, the company achieved the highest return on capital employed (ROCE) and return on equity (ROE) margins among large infrastructure construction companies in India, as per the Fitch Report.
For the six months ended September 2023, Afcons Infrastructure recorded a total income of Rs 6,655.35 crore, compared to Rs 12,844 crore in FY23. The net profit for the same period was Rs 195.13 crore, down from Rs 410.86 crore in FY23.
