Afcons Infrastructure IPO: Strong Subscription The initial public offering (IPO) of Afcons Infrastructure Limited opened on October 25, 2024, and will close on October 29, 2024, giving investors just one day left to apply for the public issue valued at ₹5,430 crore. The company has set the price band for its IPO at ₹440 to ₹463 per equity share, comprising a mix of fresh shares and an offer for sale (OFS).

During the first two days of bidding, Afcons Infrastructure’s IPO subscription received a modest response. However, prominent brokerages such as Anand Rathi, Arihant Capital Markets, BP Equities, Canara Bank Securities, Geojit Securities, GEPL Capital, KR Choksey Securities, Marwadi Shares and Finance, Mehta Equities, SMIFS, and Swastika Investment have recommended a ‘subscribe’ rating for the public issue. The shares are also available in the grey market, where they are currently trading at a premium of ₹25.

As of today, the Grey Market Premium (GMP) for the Afcons Infrastructure IPO stands at ₹25, reflecting a ₹7 increase from Monday’s GMP of ₹18. Market observers attribute this rise in grey market sentiment to improved conditions in the Indian stock market following a pullback rally. They anticipate that grey market sentiments may strengthen further if domestic buyers continue to be net buyers.

By 11:24 AM on the third day of bidding, the public issue had been subscribed 0.77 times overall, with the retail portion at 0.46 times, the Non-Institutional Investor (NII) segment at 1.60 times, and the Qualified Institutional Buyer (QIB) segment at 0.67 times. Anand Rathi, assigning a ‘subscribe’ rating, noted that at the upper price band, the company is valued at 37.9 times its FY24 earnings and 46.3 times if FY25 earnings are annualized. With an expected market capitalization of ₹1,70,261.8 million and a market cap-to-sales ratio of 1.34 based on FY24 earnings, they consider the issue fully priced and recommend a “Subscribe – Long Term” rating.

Geojit Securities also rated the public issue as a ‘subscribe’, stating that at the upper price of ₹463, Afcons Infrastructure Limited (AIL) trades at a P/E ratio of 38 times for FY24, aligning with its peers. The firm’s strategic positioning for growth is bolstered by government initiatives aimed at infrastructure development, increased budget allocations, and rapid urbanization. AIL’s extensive experience in executing high-value, complex projects enhances its profit margins, while geographical diversification across various sectors mitigates risks and broadens revenue streams. Given its robust order book and successful project completion track record, they recommend a “Subscribe” rating for medium- to long-term investment.

BP Equities also endorsed the issue with a ‘buy’ rating, noting that the company’s valuation at a P/E ratio of 35.1 times based on FY24 earnings is lower than the industry average. With a strong market position, the company is well-placed to leverage emerging opportunities, warranting a “SUBSCRIBE” recommendation for medium- to long-term perspectives.

Afcons Infrastructure IPO: Strong Subscription  Indian shares are expected to open higher today, buoyed by positive global signals. As of 7:03 AM, GIFT Nifty futures rose by 39 points to reach 24,387.

On Wall Street, the Dow Jones climbed 0.66% on Monday, while the S&P 500 and Nasdaq Composite gained 0.27% and 0.26%, respectively. Following this trend, Asian markets also saw upward movement, with Japan’s Nikkei index up by 0.22%.

In the previous trading session in India, the BSE Sensex increased by 602.75 points (0.76%), closing at 80,005.04. The NSE Nifty 50 also rose, finishing higher by 158.35 points (0.65%) at 24,380.80. Investors will be closely monitoring the Q2 results from companies like Adani Enterprises, Adani Ports, Cipla, Marico, and Maruti Suzuki, which will be announced today. They will also react to Q2 results released after market hours on Monday for companies like Sun Pharma, Ambuja Cements, JSW Infra, and Adani Power.

In a recent monthly economic review, the finance ministry expressed concerns about moderating urban demand, declining consumer sentiments, and reduced footfall. It also highlighted early signs of artificial intelligence (AI) impacting job displacement, as indicated by anecdotal reports. In the primary market, the IPO of Afcons Infrastructure will close for subscriptions today, and shares of Danish Power, OBSC Perfection, and United Heat Transfer are set to list on NSE SME.

Reports indicate that Swiggy’s IPO will open for subscriptions from November 6 to November 8, 2024. This week is expected to be busy on Wall Street, with around 169 S&P 500 companies scheduled to report their third-quarter earnings.

Investors are also keenly observing developments surrounding the elections scheduled for November 5. Millions of Americans have already voted, with polls indicating a close race between Republican Donald Trump and Democratic candidate Kamala Harris. A recent Reuters/Ipsos poll shows Harris leading Trump marginally with 46% to 43%.

On the economic front, US house price index data for August will be released today. Closer to home, Japan’s markets are still processing the results of Sunday’s general elections, while Chinese markets are focusing on the People’s Bank of China’s liquidity injections into the financial system. Japan’s jobless rate fell to 2.4% in September, down from 2.5% in August, according to an early report.

After a 6% drop on Monday, Brent crude oil futures have slightly recovered, increasing by 0.63% to $71.87 per barrel. Tensions in West Asia appear to be easing, as Israeli Prime Minister Benjamin Netanyahu expressed hopes for peace deals with more Arab countries once the conflict with Iranian proxies Hamas and Hezbollah is resolved.

Currently, the Nifty 50 Index is considered oversold, with technical indicators like RSI, MACD, and Stochastics in oversold territory, suggesting a potential bounce in the near term. Resistance levels are seen at 23,400, 24,525, 24,636, and 24,750, while support is expected at 24,075 and 23,965. Given the current market conditions, the best trading strategy is to accumulate stocks on dips, using these opportunities to position for an expected rebound.

The Nifty has shown buying interest from the support zone of 24,000 to 24,090, where the daily lower Bollinger band is situated. The hourly momentum indicator has signaled a positive crossover, indicating a likely continuation of the counter-trend pullback rally over the next few sessions, potentially reaching 24,900 to 24,930, where key daily moving averages lie.

The Nifty Bank opened higher and experienced positive price movements throughout the day, with expectations for consolidation between 52,800 and 50,500 from a short-term perspective. After several volatile days, the Nifty closed with meaningful gains, sustaining above the previous day’s low, suggesting strong buying momentum. This strength may continue as long as the index remains above 24,000; a significant drop below this level could trigger panic selling. Resistance is seen at 24,500, and a decisive move above this threshold could initiate a rally.

According to NSE data, Foreign Institutional Investors (FIIs) were net sellers of Indian equities, amounting to ₹3,228.08 crore, while Domestic Institutional Investors (DIIs) were net buyers, purchasing equities worth ₹1,400.85 crore.

Afcons Infrastructure IPO Listing Date and Live Updates:

Afcons Infrastructure IPO: Strong Subscription  Afcons Infrastructure has successfully raised ₹1,621.50 crore from anchor investors by offering 35 million shares in its IPO, which opened on October 25 and will close on October 29, a day before Diwali 2024. The IPO has seen a total subscription of 0.10 times, with retail investors subscribing at a rate of 0.14 times. The company aims to raise ₹5,430 crore through this offering.

The allotment of shares is expected to be finalized on October 30, with the listing likely on November 4. The IPO price band is set between ₹440 and ₹463 per share, with a reservation of up to 631,313 shares for employees at a discount of ₹44 to the issue price. The book-running lead managers for this IPO include ICICI Securities, Dam Capital Advisors, Jefferies India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management, and SBI Capital Markets.

IPO Subscription Status:

Afcons Infrastructure IPO: Strong Subscription  Afcons Infrastructure’s IPO had a slow start, with an overall subscription of 36% by the second day, driven by strong interest from non-institutional investors (72%) and retail individual investors (36%). Qualified institutional buyers (QIBs) subscribed at just 8%, while the employee segment saw significant interest, being oversubscribed at 1.01 times.

The IPO consists of a fresh issue of shares worth ₹1,250 crore and an offer for sale (OFS) of ₹4,180 crore by the promoter. The promoters, including Goswami Infratech Private Limited, Shapoorji Pallonji and Company Private Limited, and Floreat Investments Private Limited, held an impressive 99.48% stake prior to the IPO, which is expected to adjust slightly post-issue, maintaining significant control within the company.

Afcons Infrastructure IPO: Strong Subscription  Shares of Afcons Infrastructure are currently trading at a grey market premium of over 8%, indicating potential listing gains. The complete IPO timeline is as follows:

– IPO Open Date: October 25, 2024
– IPO Close Date: October 29, 2024
– Basis of Allotment Date: October 30, 2024
– Initiation of Refunds: October 31, 2024
– Credit of Shares to Demat Accounts: October 31, 2024
– Listing Date: November 4, 2024
– UPI Mandate Confirmation Cut-off Time: 5 PM on October 29, 2024

Investors should confirm their UPI mandates by the specified deadline.

Financial Performance:

Afcons Infrastructure IPO: Strong Subscription  Afcons Infrastructure has demonstrated strong financial growth, with a 6% increase in revenue for the fiscal year ending March 31, 2024, totaling ₹13,646.88 million, compared to ₹12,844.09 million the previous year. The company’s profit after tax also rose by 9%, reaching ₹449.76 million, up from ₹410.86 million in the previous fiscal year.

As of June 30, 2024, Afcons reported total assets of ₹17,184.58 million, with a net worth of ₹3,662.25 million, marking a significant increase from ₹3,155.06 million in March 2023.

Company Overview:

Afcons Infrastructure IPO: Strong Subscription  Incorporated in 1959, Afcons Infrastructure Limited is a key player in infrastructure engineering and construction within the Shapoorji Pallonji Group, boasting over six decades of experience. The company has successfully completed 76 projects across 15 countries and currently operates 67 active projects in 13 countries, with a robust order book valued at ₹348.88 billion.

Allotment Status:

Afcons Infrastructure IPO: Strong Subscription  The allotment status for the Afcons Infrastructure IPO is expected to be released on October 30, 2024. Investors can check their allotment status by selecting the company name and entering their PAN Number, Application Number, or DP Client ID.

With a solid promoter holding structure and strong financial backing, Afcons Infrastructure is well-positioned for its IPO and future growth in the infrastructure sector.