Afcons Infrastructure Limited, established in 1959 and serving as the flagship infrastructure company of the Shapoorji Pallonji group, made a weak debut on the Indian stock market on Monday, 4th November 2024, with its shares listing at a discount on both NSE and BSE. The company, with 67 active projects across 13 countries and an order book of ₹34,888 crore as of September 2023, operates across five major infrastructure verticals.

Listing Details

• Listing Price: Afcons Infrastructure share price was listed at ₹426 per share on NSE and ₹430.05 on BSE at market open, marking a disappointing start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a significant discount to the IPO issue price. Afcons had set its IPO price band from ₹440 to ₹463 per share, with the final issue price being fixed at the upper end of ₹463.
• Percentage Change: The listing price of ₹426 on NSE translates to a discount of 8% over the issue price of ₹463, while on BSE it listed at a discount of 7.12%.

First-Day Trading Performance

• Opening vs. Latest Price: Following its weak opening, by 10:25:17 AM IST, the stock recovered significantly and was trading at ₹459.05, up 7.76% from its opening price but still below the issue price.
• Market Capitalisation: As of 10:25:17 AM IST, the company's market capitalisation stood at ₹16,883.15 crore.
• Trading Volume: The traded volume was 291.61 lakh shares with a traded value of ₹1,269.98 crore, with 99.94% deliverable quantity

Market Sentiment and Analysis

• Market Reaction: After a weak opening, the stock showed strong recovery during early trading.
• Subscription Rate: The IPO was modestly oversubscribed by 2.77 times (as of October 29, 2024, 6:19:07 PM), with NIIs leading at 5.31 times subscription, followed by QIBs at 3.99 times, and retail investors at 0.99 times.
• Trading Range: As of 10:25:17 AM IST, the stock hit a high of ₹459.30 and a low of ₹420.25 during early trading.

Growth Drivers and Challenges

Expected drivers of future performance:

• Strong track record in complex project execution
• Diversified order book across geographies
• 30% export revenues
• Order book of ₹40,000+ crore
• Strong global presence in Asia, Africa, and Middle East

Potential challenges:

• High valuation concerns
• Competitive infrastructure sector
• Working capital intensive business
• Project execution risks
• Global economic uncertainties

Utilization of IPO Proceeds

Afcons plans to use the funds for:

• Capital expenditure for construction equipment
• Long-term working capital requirements
• Repayment of borrowings
• General corporate purposes

Financial Performance

The company has shown steady growth:

• Revenue increased by 6% to ₹13,646.88 crore in FY2024 from ₹12,844.09 crore in FY2023
• Profit After Tax rose by 9% to ₹449.76 crore in FY2024 from ₹410.86 crore in FY2023

As Afcons Infrastructure begins its journey as a listed entity, market participants will closely monitor its ability to execute its large order book and maintain growth momentum. The weak listing but subsequent recovery suggests mixed market sentiment towards the company's prospects in the infrastructure sector.
 

• Market Reaction: After a weak opening, the stock showed strong recovery during early trading.
• Subscription Rate: The IPO was modestly oversubscribed by 2.77 times (as of October 29, 2024, 6:19:07 PM), with NIIs leading at 5.31 times subscription, followed by QIBs at 3.99 times, and retail investors at 0.99 times.
• Trading Range: As of 10:25:17 AM IST, the stock hit a high of ₹459.30 and a low of ₹420.25 during early trading.
• Strong track record in complex project execution
• Diversified order book across geographies
• 30% export revenues
• Order book of ₹40,000+ crore
• Strong global presence in Asia, Africa, and Middle East
• High valuation concerns
• Competitive infrastructure sector
• Working capital intensive business
• Project execution risks
• Global economic uncertainties
• Capital expenditure for construction equipment
• Long-term working capital requirements
• Repayment of borrowings
• General corporate purposes
• Revenue increased by 6% to ₹13,646.88 crore in FY2024 from ₹12,844.09 crore in FY2023
• Profit After Tax rose by 9% to ₹449.76 crore in FY2024 from ₹410.86 crore in FY2023