Afcons Infrastructure, the flagship company of the Shapoorji Pallonji Group, made a reserved debut on the stock market, with shares listing below the IPO price on both the BSE and NSE. This underwhelming launch reflects cautious market sentiment amid volatile conditions despite Afcons’ strong project portfolio and steady financial performance. Analysts believe the company’s fundamentals could still make it a solid long-term share market investment.
IPO listing performance on BSE and NSE
Afcons Infrastructure’s shares debuted on the Bombay Stock Exchange (BSE) at ₹430.5, down 7.01% from the IPO price of ₹463. Meanwhile, on the National Stock Exchange (NSE), the shares are listed at ₹426, reflecting a 7.99% discount.
Ahead of the listing, the grey market premium (GMP) for Afcons Infrastructure’s IPO stood at around ₹15, or 3.42%, indicating a modest reception and raising concerns over market sentiment. Industry analysts suggest that this cautious debut stems from broader market conditions despite Afcons’ solid financial health and extensive project portfolio.
Long-term potential for investors
Despite the discounted start, industry analysts suggest that Afcons Infrastructure’s strong fundamentals could offer value in the long run. The company’s stable financial performance and strong project pipeline could support share market investment, making it a potentially worthwhile hold for investors with a long-term outlook. Analysts note that patient investors may benefit as market conditions stabilise, possibly resulting in gradual value appreciation.
IPO subscription overview
Afcons Infrastructure's IPO, which included a fresh issue of 26,997,840 shares and an offer for sale of 90,280,778 shares, closed on October 29, 2024. The IPO price range was set at ₹440-₹463 per share, with each lot containing 32 shares.
According to NSE data, the IPO received bids for 22,78,22,496 shares, marking an oversubscription of 2.63 times. Qualified Institutional Buyers (QIBs) led the interest with a subscription rate of 3.79 times, followed by Non-Institutional Investors (NIIs) at 5.05 times. Retail investors’ participation was more subdued, at 0.94 times. The allotment basis was finalised on October 30, 2024.
Company profile and revenue breakdown
Afcons Infrastructure, a major player in engineering, procurement, and construction (EPC), brings notable credentials to share market investment. In FY24, its revenue was largely driven by EPC projects (72.37%), with item-rate projects contributing 27.38% and cost-plus projects 0.25%. The company has completed 79 projects across 17 countries and currently manages 65 ongoing projects across 12 nations. Its order book stands at ₹31,747 crore, emphasising Afcons’ potential for sustained growth.
Key takeaways
For android only