Afcons Shapoorji proposes an IPO of Rs 7,000 crore

MUMBAI: Afcons Infrastructure, a subsidiary of the Shapoorji Pallonji Group, intends to launch an initial public offering (IPO) with a target value of more than Rs 19,000 crore. This would be the biggest infrastructure IPO in the nation in at least ten years. The firm aims to generate Rs 7,000 crore from the share sale. It was purchased by the construction-to-real estate conglomerate from ICICI Bank in the early 2000s.

This will be the group’s second venture into the main market, after Wilson Renewable Energy and Sterling. After making its market debut in August 2019 on local exchanges, SP sold shares to reduce debt, and Reliance Industries currently owns the majority of Sterling.

Only Forbes & Company, with a market capitalization of Rs 558 crore, and Gokak Textiles, with a market capitalization of Rs 77 crore, are now listed on stock markets as SP businesses. The Tata Group was the seller of both businesses. By selling a portion of its investment in the Afcons IPO, SP is expected to get Rs 5,750 crore, while the infrastructure development business is expected to collect Rs 1,250 crore via the issuance of new shares to investors.

According to the company’s IPO filings with market regulator Sebi, Goswami Infratech, which owns approximately 72% of the company, will be the only one involved in the IPO; no shares will be sold to investors by the other promoters, Shapoorji Pallonji and Company (which owns approximately 17%), Floreat Investments (8%), Hermes Commerce (1.19%), and Renaissance Commerce (1.18%).
It said that 33.1 crore shares, or 97% of the company’s stock, are pledged to lenders. Of this, 7.5 crore shares were made available prior to the IPO documentation being filed. A further “unspecified number of shares” will be made available before the amended offer papers are filed.
Afcons also said that if a pre-IPO placement of Rs 250 crore is undertaken, the size of the new offering will be lowered.

The IPO profits would be used by SP to reduce its Rs 20,000 crore debt. To strengthen its financial sheet, it has liquidated assets for a total of Rs 11,000 crore so far. SP and Adani Ports signed a Rs 3,350 crore sale deal for SP’s Gopalpur port in Odisha earlier this week. Additionally, SP holds around 18% of Tata Sons, the Tata Group’s parent company, although all of its equity is backed by loans.