Afcons Infrastructure Limited Systems Limited – About the Company
Shapoorji Pallonji Group, a leading Indian conglomerate involved in infrastructure engineering and Construction Company with over six decades of experience. With decades of experience come rewards that speak more than the company profile and its reach beyond the company’s primary geographical area. The company has expanded its presence globally, particularly across Asia, Africa, and the Middle East.
The company focuses on five major infrastructure business verticals: Marine and Industrial, Surface Transport, Urban Infrastructure, Hydro and Underground, and Oil and Gas. They have undertaken many complex, challenging, unique, and 'first of its kind' infrastructure projects in India and the rest of the world. Some of their key completed and ongoing projects include the Chenab Bridge, the world's tallest single-arch railway bridge, the Atal Tunnel, the MG Setu Bridge, the Annaram Barrage, the Fourth Container Terminal, JNPT, the Zambia-Lusaka City Decongestion Project, the Kolkata Metro, the Male to Thilafushi Link Project, the Ghana Rail Project, and the Mumbai- Ahmedabad High Speed Railway (MAHSR-C-2).
As per the 2023, the company has completed 76 projects across 15 countries and the company has 67 active projects across 13 countries, aggregating to an order book of Rs.348.88 billion.
Afcons Infrastructure Limited IPO Objectives
The issue of Afcons Infrastructure Limited consists of fresh issue and offer for sale (OFS).
- Offer for sale by promoter comprises up to [●] Equity Shares aggregating up to Rs. 5,750 crores.
- The company proposes to utilise the Net Proceeds of fresh issue for following objectives:
| Particulars | Estimated Amount |
| Capital expenditure towards purchase of construction equipments | Rs 150 Crores |
| Funding long term working capital requirements | Rs 350 crores |
| Prepayment or scheduled repayment of a portion of certain outstanding
borrowings and acceptances availed by our Company |
Rs. 500 crores |
| General corporate purposes | [●] |
Afcons Infrastructure Limited IPO Details:
| IPO Open Date | To be Announced |
| IPO Close Date | To be Announced |
| Basis of Allotment | To be Announced |
| Listing Date | To be Announced |
| Face Value | Rs 10 per share |
| Price | To be Announced |
| Lot Size | To be Announced |
| Total Issue Size | Up to [●] Equity Shares |
| aggregating up to Rs. 70,000 crore | |
| Fresh Issue | Up to [●] Equity Shares |
| Aggregating up to Rs. 1,250 crores | |
| Offer For Sale | Up to [●] Equity Shares |
| Aggregating up to Rs. 5,750 crores | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 50% of the Net Issue |
| Retail Shares Offered | Not more than 35% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Afcons Infrastructure Limited IPO Issue Price & Size
Issue price of Afcons Infrastructure limited IPO hasn’t been disclosed yet but it will be updates as when the Red Herring Prospectus is filled with SEBI. Investors looking to bid can apply for the AFCONS INFRASTRUCTURE LIMITED IPO between these price bands. The total issue size of the AFCONS INFRASTRUCTURE LIMITED IPO is Rs. 7,000 crores with offer-for-sale of Rs. 1,250 cr shares and a fresh issue of Rs 5,750 crores.
Afcons Infrastructure Limited IPO Launch Date
AFCONS INFRASTRUCTURE IPO will be open on (XX-XX-XXXX) and close on the (XX-XX-XXXX). All types of investors can bid of this IPO between these dates through their eligible categories.
Afcons Infrastructure Limited Financial Statement:
| Particular | As of, and for the financial year ended, | |||
| September 30, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Order Book (INR Million) | 348883.9 | 304057.7 | 328048.4 | 262484.6 |
| Domestic Order Book (INR Million) | 260960.7 | 212459.4 | 233125.3 | 191204.5 |
| Domestic Order Book % | 74.79 | 69.87 | 71.06 | 72.84 |
| Overseas Order Book (INR Million) | 87953.2 | 91598.3 | 94923 | 71280.2 |
| Overseas Order Book % | 25.21 | 30.13 | 28.94 | 27.16 |
| Book to Bill Ratio (x) | 2.68 | 2.41 | 2.98 | 2.8 |
| Order Inflow (INR Million) | 79989.8 | 79238.3 | 168830.4 | 77997.7 |
| Revenue from operations (INR Million) | 46053.92 | 126373.8 | 110189.7 | 93755.62 |
| % Revenue from overseas projects | 28.1 | 31.9 | 32.3 | 36 |
| Total Income (INR Million) | 66.553.51 | 128.440.90 | 112695.5 | 95211.24 |
| EBITDA (INR Million) | 7080.02 | 13737.89 | 10685.99 | 8973.95 |
| EBITDA Margin (%) | 10.64 | 10.7 | 9.48 | 9.43 |
| Profit after tax (PAT) (INR Million) | 19.51.27 | 4108.6 | 3576.05 | 1699.07 |
| PAT Margin (%) | 2.93 | 3.2 | 3.17 | 1.78 |
| Cash Profit Margin (%) | 6.31 | 6.87 | 6.33 | 4.41 |
| Equity attributable to shareholders of the Company - Total Equity (INR Million) | 33535.9 | 31757.18 | 27120.8 | 23900.23 |
| Total Debt (INR Million) | 28439.21 | 15628.16 | 15552.01 | 15885.89 |
| Net Debt (INR Million) | 21403.13 | 11853.72 | 10287.85 | 8776.47 |
| Net Debt to EBITDA (x) | 1.51 | 0.86 | 0.96 | 0.98 |
| Total Debt to Equity (x) | 0.85 | 0.49 | 0.57 | 0.66 |
| Return on Equity (ROE) (%) | 12.58 | 13.96 | 14.02 | 7.33 |
| Return on Capital Employed (ROCE) (%) | 17.06 | 20.04 | 17.3 | 16.5 |
| Cash Flow from Operations (CFO) (INR Million) | -1801.76 | 12154.82 | 4104.53 | 9288.88 |
| CFO/EBITDA (% | -25.45 | 88.48% | 57.13 | 103.51 |
| Net Working Capital (in days) | 73 | 38 | 43 | 42 |
Afcons Infrastructure Limited IPO Promoters & Shareholding of the Company
There are 3 promoter of Afcons Infrastructure Lmited.
- Goswami Infratech Private Limited
- Shapoorji Pallonji and Company Private Limited
- Floreat Investments Private Limited.
The promoters collectively hold 330,889,612 equity shares, representing 97.11% of the issued, subscribed and paid-up equity share capital of company.
Why Invest in Afcons Infrastructure Limited IPO?
While investing in an IPO-bounded company, one should check their fundamentals that help them to know its financial performance and competitive strength which at last drives its business growth. Fundamental analysis apart from financial and competitive strength, also help you to know the risk factors that can affect the business operations and future prospects of the company. After evaluating the variables such strength weakness, financials, you may strike a balance and decide to invest or not invest in an IPO.
Competitive Strengths:
Strong Track Record
They are leading infrastructure engineering and Construction Company, which specializes in large and complex projects both in India and overseas. With decade of experience and international clientage come strong track record in efficient project management, execution, and on-time delivery across verticals and geographies. The company has undertaken numerous complex, challenging, unique, and 'first of its kind' infrastructure projects.
In the 2023 ENR Top International Contractors rankings, the company was
- The 10th largest international marine and port facilities contractor in the world
- The 12th largest contractor in the bridges segment
- The 42nd largest contractor in the transportation segment
- The 18th largest contractor in the transmission lines and aqueducts segment.
Diversified Order Book across Geographies, Clients, and Business Verticals
Over time, Afcons Infrastructure has expanded and diversified its order book, reflecting its commitment to organic and sustainable growth.
The company's order book is diversified across business verticals, geography and also in relation to clientele. In terms of business verticals, Urban Infrastructure holds major part of business vertical. Project concentration international and domestic has been diversified. Government is their top client, as big public development orders can only be sponsored by the government. Government contracts are sourced from various entities across geographies, including state agencies and public sector undertakings.
| Business Vertical | As of | |||
| September 30, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Marine and Industrial | 27894.14 | 29092 | 39979.55 | 32341.77 |
| Surface Transport | 35690.55 | 3869.45 | 40173 | 57655.74 |
| Hydro and Underground | 90558.8 | 85430.25 | 43272.01 | 42890.83 |
| Oil and Gas | 20208 | 22470 | 9873.7 | 14701 |
| Urban Infrastructure | ||||
| Underground and elevated metro | 130512 | 77659.21 | 105041.03 | 66351.41 |
| Elevated corridors and bridges | 44018 | 49535.9 | 69708.85 | 48543.73 |
| Total | 348883.91 | 304057.677 | 328048.34 | 262484.65 |
| Geography | As of | |||
| September 30, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| India | 74.79% | 69.87% | 71.06% | 72.84% |
| Overseas | 25.21% | 30.13% | 28.94% | 27.16% |
| Types of clients | As of | |||
| September 30, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Government | 68.42% | 62.19% | 62.98% | 68.30% |
| Multilateral | 21.58% | 25.05% | 25.98% | 20.98% |
| Private Sector | 9.99% | 12.76% | 11.04% | 10.72% |
Selectively Pursue Large Value and Complex Projects
Afcons Infrastructure focuses on pursuing big ticket and complex projects that fit their project selection process and risk management framework. As per draft, they avoid projects with a significant number of competing bids meaning they don’t compromise on margins through aggressive price bidding. They target technically complex projects in specialized areas, as they offer better profit margins.
The company has experience in executing multiple technically challenging projects across various business verticals, such as Marine and Industrial and Surface Transport. They have executed over 235 Marine and Industrial projects in 15 countries, including 206 projects in India, and several large value expressway projects.
They have constructed several high-value projects under Urban Infrastructure business vertical, including 100+ km of elevated and underground metro networks, bridges, viaducts, flyovers, and 32 metro stations across nine Indian cities.
Strong Risk Management
Afcons Infrastructure with its experienced senior management personnel are responsible for analyzing and evaluating proposed new bids and investments various perspectives like credit risk, market risk, and operational risk associated or capital expenditures. Management operates on a systematic risk management system to identify, measure, and monitor risks in the infrastructure sector.
Risks Factors:
Significantly depends on government projects
The company's business relies heavily on projects awarded by government and government-owned customers, both in India and other countries. These clients include central or state governments, governmental organizations, and public sector undertakings.
| Types of clients | As of | |||
| September 30, 2023 | March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Government | 68.42% | 62.19% | 62.98% | 68.30% |
| Multilateral | 21.58% | 25.05% | 25.98% | 20.98% |
| Private Sector | 9.99% | 12.76% | 11.04% | 10.72% |
Capital intensive business
Infrastructure engineering and Construction is a capital intensive business and it requires significant amount of working capital. Working capital is required for mobilizing resources, such as construction materials and labor, and for other work on projects before payment is received from customers.
The company fulfills its working capital funding requirements are through various sources, including cash credit facilities, working capital demand loans, bill discounting, and vendor financing. As of Sep 30, 2023, the company had utilized working capital demand loans from banks amounting to Rs.13,904.47 million.
International operations expose them to adversaries
There are various risks that come with international operations, which include difficulties in enforcing contractual rights, foreign currency risks, compliance with laws, tax consequences, tariffs, quotas, and other barriers.
The company generates a significant portion of its total revenue from international markets, primarily Africa, the Middle East, and South Asia (ex-India), including Bangladesh and the Maldives. So the company has to transact a significant portion of its business in several other currencies and international dealing re usually settled in foreign currency usually in Dollars, making it susceptible to exchange rate fluctuations. For the 6 month period ended Sep 30, 2023 and the FY23, FY22, and FY21, net gains on foreign currency transactions amounted to Rs.65.8 crores, Rs.68.4 crores, Rs.50.09 crores, and Rs.6 crores.
Certain geographical regions like Mali, Guinea, Sudan, and Chad, have been the subject of geopolitical tensions in recent years.
Risks arising from interest rate fluctuations
Inflation effects have been consistent in the after match of Covid. Consequence of which, RBI had to raise benchmark interest rate to bring inflation under control. Therefore, interest rates for borrowings could negatively impact the company's operations, margins and financial condition. If the interest rates stays higher for longer or take a sharp move on upside, it can increase the cost of servicing debt, affecting both borrowing expenses and income from short-term deposits. As of Sep 30, 2023, the interest rates for borrowings ranged from 8% to 11.10% per annum.
Afcons Infrastructure Limited IPO Grey Market Premium (GMP)
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the AFCONS INFRASTRUCTURE is trading around Rs XXX in the grey market. It means shares are trading at the upper band issue price of Rs XXX with a premium or discount in the grey market and may list around the same price.
How to Apply for AFCONS INFRASTRUCTURE IPO?
To apply in AFCONS INFRASTRUCTURE IPO you need to opendemat account to hold your allotted shares and a trading account to sell or buy the shares into the secondary market. And not only applying in the IPO, but while buying or selling the shares in the stock market you also need both these types of accounts. Hence, you can apply here at Moneysukh to open a trading and demat account at the lowest brokerage.
Also Read: Features of Best Demat Account with Lowest Brokerage Charges in India
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Also Read: Equity or Commodity which is better for Trading or more Profitable
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Steps to Apply for AFCONS INFRASTRUCTURE IPO:
Step 1: When AFCONS INFRASTRUCTURE IPO opens you can bid online.
Step 2: Just go to trade.moneysukh.com and log in with your User ID & password.
Step 3: Now look for the IPO section and click on the AFCONS INFRASTRUCTURE IPO.
Step 4: Here you need to fill in the required details like price, quantity, and so on.
Note: At the time of applying for the IPO, make sure to bid at the cutoff price and then submit your application.
Step 5: Now make the required payment and then submit your IPO application successfully.
How to Check AFCONS INFRASTRUCTURE IPO Allotment Status?
Checking the allotment status online is very easy if you have the PAN details and IPO application number. But checking the details of the IPO allotment is possible only when the basis of allotment is arrived. In the case of AFCONS INFRASTRUCTURE IPO, you can also check the allotment status through various online sources.
Also Read: How to check IPO allotment status on NSE, BSE through Moneysukh
And the basis of the allotment is highly dependent on the oversubscription of the IPO. If the IPO is oversubscribed by many folds, then for the investors who applied through the retail category or HNI category, the chances of getting the allotment become very low. Here while applying to such over-demanding IPOs you can follow some tips to improve your chances of getting the allotment in IPO.
Also Read: How to Increase the Chances of IPO Allotment
And when due to oversubscription of IPOs, you don’t get any allotment of shares, then your money will be refunded back into your bank account or fun will be unblocked if you applied through ASBA. However, despite the oversubscribed IPO, if get the allotment then the allocated shares will be transferred into your demat account any time before the date of listing. That you can sell in the secondary market after listing or keep from the long-term investment point of view.
