The initial public offerings (IPOs) for Afcons Infrastructure and Godavari Biorefineries are now open for subscription. The Godavari Biorefineries IPO will close today, October 25, while Afcons Infrastructure’s IPO opened today and will be available for subscription until October 29. So far, the Afcons IPO has had a slow start in a weak market.
While both IPOs are significant, experts suggest that Afcons Infrastructure may be the better choice over Godavari Biorefineries.
Afcons Infrastructure IPO vs. Godavari Biorefineries IPO
Afcons Infrastructure is a large engineering and construction company from the Shapoorji Pallonji Group. Its IPO is worth ₹5,430 crore, with a new share issue of ₹1,250 crore and an offer for sale (OFS) of ₹4,180 crore. The price range for Afcons shares is set between ₹440 and ₹463.
The company plans to use the money raised from the IPO to buy construction equipment, support long-term working capital, repay some debt, and for general corporate purposes.
On the other hand, Godavari Biorefineries is offering shares worth ₹555 crore, with a new share issue of ₹325 crore and an OFS of 65.27 lakh shares from its promoters. The price range for Godavari’s shares is between ₹334 and ₹352. The company plans to use the funds to repay debt and for other general purposes.
Expert Opinions
Arun Kejriwal, founder of Kejriwal Research and Investment Services, believes the two IPOs are not directly comparable, as Afcons Infrastructure is much larger in terms of revenue and profit. Afcons also has a strong reputation for handling difficult engineering projects, such as the Atal Tunnel and the railway bridge over the Chenab River, both known for their challenging environments. Kejriwal points out that Afcons’ IPO price is attractive and could offer gains for both short and long-term investors.
Regarding Godavari Biorefineries, Kejriwal notes that the company produces a mix of bio-based chemicals, sugar, ethanol, and power, but none of these segments stand out. The most promising area is its bio-based chemicals, but this will take time to scale up. Kejriwal doesn’t see the IPO as particularly exciting or essential for investors.
Rajan Shinde, a research analyst at Mehta Equities Ltd, sees Afcons Infrastructure as a strong investment opportunity. He highlights the company’s solid track record of completing large projects ahead of time, its strong order book, and partnerships with big companies like Arcelor Mittal and Reliance Industries. Shinde recommends subscribing to the Afcons IPO for long-term gains, given its key role in the infrastructure sector.
In conclusion, while both IPOs have their merits, experts favor Afcons Infrastructure for its proven performance and better long-term potential.
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