Afcons infrastructure shares disappoint at market debut; stock lists at 8% discount

Shares of Afcons Infrastructure Ltd made a muted Dalal Street debut on Monday as the Shapoorji Pallonji Group firm was listed at Rs 426 on NSE, a discount of 7.99 per cent over its issue price of Rs 463. Similarly, the stock kicked off the maiden trading session with a discount of 7.12 per cent at Rs 430.05 on BSE over the given issue price.

The listing of Afcons Infrastructure has been below the expected lines amid the selling pressure in the market volatility. Ahead of its listing, shares of Afcons Infrastructure were commanding a grey market premium (GMP) of Rs 20-25 apiece in the unofficial market, suggesting a 5-6 per cent listing pop for the investors.

The IPO of Afcons Infrastructure ran for subscription between October 25 and October 29. It had offered its shares in the fixed price band of Rs 440-463 per share with a lot size of 32 shares. The infra company raised a total of Rs 5,430 crore from its IPO, which included a fresh share sale of Rs 1,250 crore and offer-for-sale (OFS) of up to shares worth Rs 4,180 crore.

The issue was overall subscribed only 2.63 times, thanks to the last rescue by qualified institutional bidders (QIBs), whose quota was booked 3.79 times. The allocation for non-institutional investors (NIIs) was booked 5.05 times. The portion for retail investors was undersubscribed at 94 per cent, while the employee portion was booked 1.67 times.

Mumbai-based Afcons Infrastructure, incorporated in 1959, is an infrastructure engineering and construction company of the Shapoorji Pallonji group, with a legacy of over six decades. It has verticals like marine and industrial projects; surface transport projects; urban infrastructure projects; Hydro and underground projects; and oil & gas projects.

Brokerages mostly have a positive view on the issue and suggest subscribing for a long term citing. ICICI Securities, DAM Capital Advisors, Jefferies India, Nomura Financial Advisory and Securities (India), Nuvama Wealth Management and SBI Capital Markets were the book running lead managers of the Afcons Infra IPO, while Link Intime India was the registrar for the issue.