Afcons Infrastructure IPO Recommendations are drawing significant attention as the initial public offering (IPO) has opened for subscription today. The company aims to raise INR 5,430 crore through this offering, prompting several brokerage houses to provide their analyses based on the company’s financial health and market potential. Here’s a summary of the recommendations from major brokerage firms regarding the Afcons Infrastructure IPO.
Afcons Infrastructure IPO Recommendations
Afcons Infrastructure IPO Recommendations: Elite Wealth Securities – Subscribe for Long-Term
Afcons Infrastructure is a strong long-term investment opportunity, bolstered by the support of the Shapoorji Pallonji Group’s 150-year legacy, which enhances its operational excellence. The company’s positioning aligns well with the Indian government’s focus on infrastructure development, providing ample growth opportunities. With a robust order book of INR 31,747.4 crores by FY24 and a revenue increase of 4% to INR 13,267.4 crores, alongside a 9.5% rise in profit after tax to INR 449.7 crores, Afcons showcases solid financial performance. Additionally, it boasts impressive operational metrics, including a return on capital employed (ROCE) of 14.89% and EBITDA margins of 11.6%. Therefore, Afcons Infrastructure IPO recommendation is “Subscribe for Long-Term”.
Afcons Infrastructure IPO Recommendations: Jainam Securities – Subscribe for Long-Term
“Afcons Infrastructure Limited is poised as a strong long-term investment opportunity, particularly with its upcoming IPO set to raise INR 5,430 crore. As of June 2024, Afcons boasts a diversified order book worth INR 31,747 crore, reflecting a variety of clients and geographic locations, which mitigates risk and enhances growth potential. The company reported a revenue increase of over 6% to INR 13,646.88 crore in FY24 and a PAT rise of more than 9% to INR 449.76 crore,” noted the research firm. Given these strengths and the favourable outlook for the infrastructure sector in India, Jainam Securities recommends “SUBSCRIBE” for long-term investment in Afcons Infrastructure.
Afcons Infrastructure IPO Recommendations: K. R. Choksey Securities – Subscribe
KR Choksey has issued a SUBSCRIBE rating, highlighting the company’s robust growth potential and solid financial performance. They emphasize Afcons’ strategic initiatives aimed at market expansion and its strong track record in executing complex engineering projects both domestically and internationally.
Afcons Infrastructure IPO Recommendations: BP Wealth – Subscribe
BP Wealth has also taken a positive view of the upcoming IPO. “The company is valued at a P/ E ratio of 35.1x on the upper price band based on FY24 earnings, which is lower than the average P/E of the industry. Given its strong position in the market, the company is poised to capitalize on emerging market opportunities. Therefore, we recommend a SUBSCRIBE rating for the issue from a medium to long-term perspective,” recommended the analyst.
Afcons Infrastructure IPO Recommendations: Mehta Equities – Subscribe for Long-Term
Analysts at Mehta Equities find the IPO fully priced but have recommended investors to subscribe for long term. “Investors should also look at IPO offers which come with nearly 77% OFS i.e. INR 4,180/- crore with a total issue of INR 5,430 crore which is an area of concern for new investors. Given the company’s advanced equipment base, proven execution capabilities, and strategic market position, it is a key player in infrastructure sector. Hence, by looking at all attributes, we recommend investors to SUBSCRIBE to the Afcons Infrastructure for a long-term perspective only,” opined the research note.
Afcons Infrastructure IPO Recommendations: Nirmal Bang Securities – Neutral
Afcons Infrastructure, despite its strong capabilities in managing large and complex projects, has exhibited a relatively modest revenue growth rate of 10% CAGR from FY22 to FY24. In contrast, its larger peer, L&T, has achieved significantly faster growth during the same period further Afcons generates higher asset turns than its peers resulting in superior ROCE. Although Afcons has a decent order book-to-sales ratio of 2.4x, the order book is executable many years into the future.
“Afcons is currently offered at a 15% premium over the average price-to-earnings (P/E) ratio of its peers. This premium appears unwarranted given its lower growth trajectory compared to competitors. Therefore, we rate the IPO as NEUTRAL,” said analysts in the research note.
Afcons Infrastructure IPO Recommendations: SMC Moneywise – Neutral to Fair Rating (Rating 2.5 out of 5)
SMC Securities outlined the several positives with the company including proven track record in delivering large-scale projects, improving execution capabilities, diverse order book, and robust risk management. Nevertheless, the brokerage house gave the IPO 2.5 stars out of maximum 5, indicating Neutral to Fair rating as post issue, the stock is priced at a P/E of 35.93x on its
EPS of Rs. 12.25.
Afcons Infrastructure IPO Recommendations: Ventura Securities – Subscribe
The company has a strong focus on sustainability and environmental responsibility, incorporating green building practices and eco-friendly technologies into its projects. “Afcons’ commitment to reducing its environmental footprint aligns with global best practices in sustainable development. With a well-established network of suppliers, subcontractors, and partners. Therefore, we rate the IPO as Subscribe,” said Ventura Securities in its report.
Afcons Infrastructure IPO Recommendations: Swastika Investmart – Subscribe for Long-Term
Afcons Infrastructure is an infrastructure engineering and construction company of the Shapoorji Pallonji group, with a legacy of over six decades. The company has a proven track record of successfully delivering numerous intricate, demanding, and distinctive engineering, procurement, and construction (EPC) projects, both domestically and internationally. As of 30 June 2024, the company is actively engaged in 65 projects across 12 countries, with a total order book value of INR 31,747 crore. “Over time, the company has expanded its global presence, particularly across Asia, Africa, and the Middle East. Apart from some industry-related concerns, we rate the IPO Subscribe for Long-Term,” recommended the brokerage house.
Read Also: Afcons Infrastructure IPO Subscription – Live Status
Afcons Infrastructure IPO Recommendations – Bottomline
In conclusion, brokerage houses are generally optimistic about the Afcons Infrastructure IPO, recommending subscriptions based on varying risk appetites and investment horizons. While some firms advocate for long-term investments due to growth potential.
While Afcon Infrastructure IPO analyst views are mostly positive, the informal or grey market is presenting confusing signals with a remarkable decline in premiums in recent days. This is not uncommon for the market to behave this way before large IPOs and Afcon Infrastructure is going to make history with the biggest IPO in India. Nevertheless, investors are encouraged to assess their individual risk profiles and conduct thorough research before participating in this IPO.
