Afcons Infra Slashes IPO Size to ₹5,400 Cr After Raising ₹3,000 Cr in Pre-IPO Sale ;Big Boost for Shapoorji Pallonji

Afcons Infrastructure, part of the Shapoorji Pallonji Group, is planning to raise ₹5,400 crore through its upcoming initial public offering (IPO) after securing around ₹3,000 crore in a pre-IPO round, according to sources familiar with the matter. Initially, the company aimed to raise ₹7,000 crore through the IPO, but due to strong investor demand, the promoters opted for a pre-IPO offer for sale (OFS) of about ₹3,000 crore. With the pre-IPO funds included, Afcons is now looking to raise a total of ₹8,400 crore, which is 20% more than the original target of ₹7,000 crore.

Afcons may file its red herring prospectus with the Securities and Exchange Board of India (SEBI) as early as Friday, after receiving approval for its updated draft prospectus earlier in the week. The public issue is expected to open for subscription next week.

The pre-IPO shares were sold at a 30% discount compared to shares of market leader Larsen and Toubro (L&T), whose stock was trading at ₹3,557 on Thursday with a price-to-earnings ratio of 46.4, according to BSE data.

Despite the reduction in the IPO size, Afcons will still issue new shares worth ₹1,250 crore as originally planned.

The pre-IPO fundraising will provide the Shapoorji Pallonji Group, Afcons’s promoter, with extra capital to address financial challenges, particularly the debt crisis at another group company, Goswami Infratech. Goswami Infratech needs to repay ₹14,300 crore to investors in its non-convertible debentures, and the group is planning to use funds from the Afcons listing and the sale of its Gopal port in Odisha to manage the debt.

Afcons’s largest shareholders include Goswami Infratech Private Limited (72.35%), Shapoorji Pallonji and Company Pvt Ltd (16.64%), Floreat Investments Pvt Ltd (8.12%), Hermes Commerce Pvt Ltd (1.19%), and Renaissance Commerce Pvt Ltd (1.18%). Goswami Infratech will sell shares in the OFS portion of the IPO.

Record Order Inflow

Afcons Infrastructure received more orders in the first half of FY25 than in any previous full year, thanks to increased credit lines from lenders. Between April and September, the company secured new orders worth ₹11,400 crore and is set to formalize an additional ₹7,600 crore worth of contracts. This brings their total order inflow for the first half of FY25 to about ₹19,000 crore, significantly surpassing the ₹7,783 crore and ₹7,924 crore recorded in FY24 and FY23, respectively. The previous record was set in FY22, when Afcons booked orders worth ₹16,883 crore.