Afcons Infrastructure IPO Day 2: Check Subscription Status, GMP …

Mon Oct 28 09:12:10 UTC 2024: ## Afcons Infrastructure IPO Receives Muted Response from Investors

**Mumbai, October 26, 2024** – Afcons Infrastructure Ltd., a subsidiary of the Shapoorji Pallonji group, saw a subdued response to its initial public offering (IPO) which opened for subscription on Friday. The Rs 5,430-crore IPO, comprising a fresh issue of up to Rs 1,250 crore and an offer for sale (OFS) of up to Rs 4,180 crore by the promoter, has garnered only 0.31 times subscription till the second day of bidding.

The IPO, which closes on October 29, has seen weak interest across categories, with retail investors subscribing 0.31 times, non-institutional investors (NII) 0.32 times, and qualified institutional buyers (QIB) only 0.11 times.

Despite the muted response, the grey market, which reflects investor sentiment, is indicating a near 5% listing gain for investors, though significantly lower than the 13% GMP recorded last week.

Analysts are attributing the low subscription to various factors, including the current market sentiment and a perceived high valuation.

**Afcons Infrastructure boasts a strong track record of completing 79 projects across 17 countries and a robust order book of Rs 31,700 crore.**

Analysts like SBI Securities and K R Choksey have recommended subscribing to the IPO citing the company’s strong financials and growth potential. However, the IPO’s valuation at a PE multiple of 36x seems to be deterring investors.

**The IPO price band has been fixed at Rs 440 to Rs 463 per share, with the share allotment likely to be finalized on October 30, and the shares listed on BSE and NSE on November 4.**

Afcons Infrastructure, known for its execution of complex projects including the Chenab Bridge and Atal Tunnel, aims to utilize the fresh issue proceeds for capital expenditure, working capital, and debt repayment.

Whether the muted response will deter the company from achieving its IPO objectives remains to be seen, but the lukewarm reception highlights the cautious approach of investors in the current market.