The Rs 5,430 crore Initial Public Offer (IPO) of Afcons Infrastructure Limited, the company that built the Atal Tunnel and Chenab Bridge, has opened for public subscription from October 25. This IPO will close on October 29 and its listing will be on November 4. In an interview given to Dainik Bhaskar before the listing of the IPO, Afcons Infrastructure MD Paramasivan Srinivasan and the company’s Corporate Strategy Head Hitesh Kumar Singh shared many things related to the company and the IPO. Read the full interview… When did the company think that an IPO should be brought, where will the funds raised from the issue be used? Hitesh Kumar Singh said – The company is growing continuously and has requirements of funds for its further growth. For this reason, we have brought an IPO of Rs 5,430 crore. The company will get Rs 1,250 crore through fresh issue. Out of this, Rs 800 crore will be used to repay the company’s debt, which will reduce our interest rate. At the same time, Rs 300 crore will be used in working capital. The remaining money will go to meet new machine-equipment and other requirements. At the same time, Rs 4,180 crore will go to our promoters Shapoorji Pallonji Group. Shapoorji Pallonji Group has also taken some loan, so it will use this fund to repay the debt of vendors and banks. What will be the share of promoters after the IPO and what is the order book of the company? Paramasivam Srinivasan said – Promoters will remain majority shareholders even after the IPO. Currently, promoters have a 99.48% stake in the company. As of March 2024, our pending order book was around Rs 31,000 crore. At the same time, from April 1, 2024 till now this year, the company has got new projects worth Rs 19,000 crore. Why was the size of the IPO reduced from ? 7,000 crores to ? 5,430 crores? Hitesh Kumar Singh said – Earlier the size of our IPO was Rs 7,000 crores. Then its size was reduced to Rs 5,430 crores. The reason for this is that before bringing the IPO, many big investors from the country and abroad have bought shares worth about Rs 2,970 crore of the company through secondary sale, so due to this the issue size has reduced. Any special thing related to the company that you would like to tell investors? Afcons is one of the companies working in all sectors of infrastructure. About 30% of the company’s turnover comes from the international market. In the last 11 years and 3 months, the company has done about 79 infrastructure projects in 17 different countries. The funds coming from the IPO will support the company’s growth. What are the big projects of the company after Atal Tunnel-Chenab Bridge? Hitesh Kumar Singh said- ‘Afcons has done many big projects in India and abroad like Chenab Bridge, Atal Tunnel. The company is known for doing big and timely projects. Our company is dedicated to taking the country’s infrastructure story forward. Our company’s focus is always on doing big and complex projects. Right now we are doing a high speed rail i.e. bullet train project from Bombay to Ahmedabad. In this project, a tunnel of about 21 kilometers is being built from Bandra to Thane and our company is doing all this work. One special thing about the project is that out of this 21 kilometer tunnel, about 7 kilometers of the tunnel will be built under the sea. Similarly, we are doing a project of 500 million dollars i.e. Rs 4,205 crore in Maldives. In this project, we will connect four islands. This is a strategic project. This is the biggest project of Maldives till date. The company is doing similar challenging projects in India and abroad.’ What are the opportunities and challenges in the local and global market? MD Paramasivam Srinivasan said – Most of our projects are funded by the Indian government or other governments. We do not face any challenge in funding. However, sometimes we have to take material from one country to another, then in conditions like Covid or war, the logistics supply chain gets affected. This is a big problem sometimes in working abroad, apart from this there is no such major problem. Where does most of the business come from in the local and global market? 70% of our business is generated from India, the remaining 30% comes from international. Out of this 30% business, 20% is generated from multilateral funding and 10% from private clients. For example, we have been working with Reliance Industries for the last 25 years. Apart from this, we have also been working with multinational company Arcelor Mittal for the last 13-14 years. We work with such big companies of the private sector. Which of the 5 verticals of the company’s business brings the most revenue? As of March 31, 2024, we had a business of Rs 31,000 crore. Out of that, about 37% business comes from underground and elevated i.e. metro business, 28% hydro business, 10% rail route business, 9% marine business and 6% oil and gas business. If you are also planning to invest money in the IPO of Afcons Infrastructure, then we are also telling you all the details of the issue and how much you can invest in it… Retail investors can invest in the IPO till October 29 Afcons wants to raise ?5,430 crore by selling more than 11.72 crore shares through this public issue. The company will use the funds raised through the IPO to repay debt, purchase construction equipment, meet long-term capital requirements and general corporate purposes. Retail investors can invest in the company’s IPO till October 29, 2024. The company has fixed the price band of the IPO at ?440-?463 per equity share. The company’s shares will be listed on BSE-NSE on November 4. Allotment of Afcons Infrastructure shares will be done on October 30, 2024. The shares will be listed on both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on November 4. Afcons Infrastructure’s IPO is a combination of fresh issue and offer for sale This IPO of Afcons Infrastructure is a combination of fresh issue and offer for sale (OFS). Through the fresh issue, the company will sell 2.7 crore shares worth Rs 1,250 crore. At the same time, the existing shareholders and promoters of the company will sell their 9.03 crore shares worth Rs 4,180 crore through OFS i.e. Offer for Sale. The market capitalization of the company is Rs 17,026 crore. Before the issue, the promoters had 99.48% stake in the company. The promoters of the company include Goswami Infratech Private Limited, Shapoorji Pallonji & Company Private Limited and Floret Investments Private Limited. Before the issue, the promoters held 99.48% stake in the company. How much minimum and maximum money can retail investors invest? For this IPO, retail investors can apply for a minimum of one lot i.e. 32 shares. If you apply for 1 lot as per the IPO’s upper price band of ?463, then you will have to invest ?14,816. At the same time, retail investors can bid for a maximum of 13 lots of the IPO, i.e. 416 shares. For which investors will have to invest a maximum of ? 192,608. 35.35% of the company’s issue is reserved for retail investors. About 28.79% of the company’s issue is reserved for anchor investors and 20.2% for qualified institutional buyers (QIB). Apart from this, about 35.35% is reserved for retail investors and about 15.15% is reserved for non-institutional investors (NII). At the same time, 0.52% is reserved for the employees of the company. What does Afcons Infrastructure Limited do? Afcons Infrastructure was formed in 1959. It is an infrastructure engineering and construction company of Shapoorji Pallonji Group. The company is globally present in Asia, Africa and the Middle East. The company has 5 major infrastructure business verticals – Marine & Industrial, Surface Transport, Oil & Gas, Hydro & Underground and Urban Infrastructure.
