Current Subscription Status
The Afcons Infrastructure IPO, valued at ₹5,430 crore, has seen a subscription rate of 36% so far. Here’s a breakdown of the subscription across various categories:
- Non-Institutional Investors (NIIs): 72% subscribed
- Retail Individual Investors (RIIs): 36% subscribed
- Qualified Institutional Buyers (QIBs): 8% subscribed
- Employee Segment: Oversubscribed at 1.01 times
On the first day of bidding, the IPO was booked at just 10%, indicating a slow start. However, it picked up momentum in subsequent days, particularly among non-institutional investors.
IPO Details
- Price Band: ₹440 – ₹463 per share
- Lot Size: 32 equity shares
- Fresh Issuance: ₹1,250 crore
- Offer for Sale (OFS): Up to ₹4,180 crore by promoter Goswami Infratech Pvt Ltd
The IPO is backed by strong anchor investor interest, having secured approximately ₹1,621 crore prior to the public offering.
Market Sentiment and GMP Insights
On Day 3 of the bidding process, the Grey Market Premium (GMP) for Afcons Infrastructure shares stands at +₹40, suggesting that shares are trading at a premium in the grey market. This indicates a potential listing price of around ₹503, which is approximately 8.64% higher than the upper end of the IPO price band.However, it is important to note that the GMP has shown a downward trend over recent sessions, with fluctuations ranging from a low of ₹0 to a peak of ₹225 in the past month.
Analyst Ratings and Recommendations
In terms of market analysis, brokerage firm Nirmal Bang has assigned a ‘Neutral’ rating to the Afcons Infrastructure IPO. While acknowledging that Afcons excels in managing large projects, they pointed out that its revenue growth has lagged behind competitors like L&T. The company’s revenue growth from FY22 to FY24 stands at just 10% CAGR, raising concerns about its valuation compared to peers.Despite having a strong order book-to-sales ratio of 2.4x, analysts suggest that it may take several years for these orders to be completed. The current pricing reflects a 15% premium over its peers based on P/E ratios, which may not be justified given its slower growth trajectory.
Conclusion
As investors await the final subscription numbers and potential listing price for Afcons Infrastructure shares, today’s trading will be crucial for determining market sentiment towards this significant IPO. With varying opinions from analysts and fluctuating GMP figures, investors should exercise caution and consider their options carefully.
Disclaimer: The views and recommendations provided in this article are those of individual analysts and do not represent the views of Mint. We advise investors to consult certified experts before making any investment decisions.
