Shapoorji Pallonji Group's leading infrastructure engineering and construction company, Afcons Infrastructure Limited (AIL) has received approval from the Securities Exchange Board of India (SEBI) to launch an IPO. The company will raise Rs 7,000 crore through this initial public offering.
For this, the company will issue fresh shares worth Rs 1,250 crore. Whereas, Goswami Infratech Private Limited, the existing investor of Afcons Infrastructure, will sell shares worth Rs 5,750 crore through Offer for Sale i.e. OFS. The company had filed Draft Red Herring Prospectus (DRHP) for IPO with SEBI on 28 March 2024.
The company will spend ₹150 crore for construction equipment
Up to Rs 150 crore of the proceeds from the fresh issue will be used for capital requirements for the purchase of construction equipment. At the same time, Rs 350 crore will be spent to fund working capital requirements. While, Rs 500 crore will be spent for prepayment or scheduled repayment of a part of some outstanding loans and approvals taken by the company and for general corporate purpose.
Afcons operates in five major infrastructure business verticals:
- Marine and Industrial, which includes projects such as ports, harbours, dry docks, LNG tanks and material handling systems.
- Surface transport, which includes highways, interchanges, mining infrastructure and railways.
- Urban infrastructure, including metro works, bridges, flyovers and elevated corridors.
- Hydro and Underground, including dams, tunnels and water-related projects.
- Oil and Gas The oil and gas sector includes offshore and onshore projects.
Link Intime, Registrar of Afcons Infrastructure IPO ICICI Securities Limited, DAM Capital Advisors Limited, Jefferies India Private Limited, Nomura Financial Advisory and Securities (India) Private Limited, Nuvama Wealth Management Limited and SBI Capital Markets Limited are the book-running lead managers, and Link Intime India Private Limited is the registrar to the issue.
What is DRHP?
DRHP is a document that contains essential information about the company planning an IPO. It is filed with SEBI. It contains important information about the company's finances, its promoters, risks of investing in the company, reasons for raising funds, how the funds will be used, among other things.
What is IPO?
When a company issues its shares to the general public for the first time, it is called Initial Public Offering or IPO. The company needs money to expand its business. In such a situation, instead of taking a loan from the market, the company raises money by selling some shares to the public or by issuing new shares. For this, the company brings IPO.
Graphics Source: VaskarAssets
