Primary Market Schedule

IPO Market Update

The major market’s IPO flow is nevertheless robust despite the continuous decline in the equities markets. Nine initial public offers (IPOs) totaling Rs 10,985 crore are scheduled to launch on Dalal Street starting on October 21. Next week will see the listing of three significant IPOs, including Hyundai Motor India.

While major indices such as the BSE Sensex and Nifty 50 have experienced a correction of 5.9 percent and 5.4 percent, respectively, experts believe this is a temporary correction. The overall market sentiment remains positive due to stable growth and increased capital expenditure (capex). Therefore, it is anticipated that the IPO market would continue to grow in the upcoming years.

Upcoming IPOs

Waaree Energies IPO

On October 21, subscriptions for the much awaited Waaree Energies initial public offering (IPO) will be accepted at a price range of Rs 1,427-1,503 per share. The offer-for-sale (OFS) of 48 lakh shares valued at Rs 721.44 crore and a new issue of Rs 3,600 crore make up the Rs 4,321 crore public issue. Shares in the OFS will be sold by promoters Waaree Sustainable Finance and Chandurkar Investments. Prior to the IPO launch on October 18, anchor investors contributed Rs 1,277 crore to Waaree Energies, a prominent producer of solar photovoltaic modules.

Deepak Builders & Engineers India IPO

The IPO for Deepak Builders & Engineers India is scheduled to take place between October 21 and October 23. The construction company has established a price range of Rs 192-203 per share in order to raise Rs 260 crore. Promoters Deepak Kumar Singal and Sunita Singal are issuing a fresh issue of 1.07 crore equity shares valued at Rs 217.21 crore and an OFS of 21.1 lakh shares valued at Rs 42.83 crore. The business obtained Rs 78 crore from five anchor investors on October 18.

Godavari Biorefineries IPO

Producers of chemicals derived from ethanol, Godavari Biorefineries, will begin its Rs 555-crore initial public offering (IPO) on October 23 at a price of Rs 334–352 per share. The deal consists of an OFS for 65.26 lakh shares, priced at Rs 229.75 crore, and a new offering for Rs 325 crore. With this IPO, 49.26 lakh equity shares held by private equity firm Mandala Capital AG would be fully divested. The deadline for this offer is October 25.

Afcons Infrastructure IPO

Afcons Infrastructure, owned by the Shapoorji Pallonji group, will begin its Rs 5,430-crore initial public offering (IPO) on October 25. The pricing range will be disclosed on October 21. Through an OFS and a new issue, the company hopes to raise Rs 4,180 crore and Rs 1,250 crore, respectively. In the pre-IPO transaction, Goswami Infratech raised around Rs 3,000 crore. It will be the only selling stakeholder in the OFS.

SME Segment IPOs

Premium Plast IPO

The manufacturer of plastic parts for cars and businesses, Premium Plast, will launch its Rs 26-crore initial public offering (IPO) on October 21 at a price range of Rs 46–49 per share. On October 23, the IPO, which consists only of a new issue of 53.46 lakh equity shares, will come to an end.

Danish Power IPO

Danish Power, the largest-ever IPO in the SME market, is scheduled to launch on October 22 at a price range of Rs 360–380 per share. The producer of transformers wants to issue 52.08 lakh new shares in order to raise Rs 197.90 crore. The deadline for bids is October 24.

United Heat Transfer IPO

The Rs 30-crore initial public offering (IPO) of United Heat Transfer, a Maharashtra-based producer of pressure vessels and heat exchangers, is scheduled to begin on October 22 and end on October 24. The price range for a share is fixed at Rs 56–59.

OBSC Perfection IPO

Manufacturer of precision metal components OBSC Perfection will accept subscriptions for its Rs 66-crore initial public offering (IPO) from October 22 to October 24 at a price range of Rs 95-100 per share.

Usha Financial Services IPO

Through the IPO of 58.6 lakh shares, non-banking finance company Usha Financial Services hopes to raise Rs 98.45 crore. The final SME segment offering of the year will go on sale from October 24 to October 28 at a price point of Rs 160-168 per share.

IPOs Closing Next Week

On October 21, Freshara Agro Exports, an exporter of pickled products and preserved gherkins, would conclude its Rs 75.4-crore initial public offering. There have been 32.55 subscriptions to the issue thus far, with a price range of Rs 110-116 per share.

Listings Next Week

Hyundai Motor India

Following its massive IPO of Rs 27,870-crore, Hyundai Motor India, a division of the massive South Korean Hyundai Motor Company, is set to list on October 22. Qualified institutional purchasers showed a great deal of interest in the issue; their share was subscribed over seven times. The retail and non-institutional categories, however, have insufficient registrants. Analysts predict that Hyundai’s stock will list flat to negatively.

Lakshya Powertech

In the SME sector, following an IPO that was oversubscribed by over 550 times last week, Lakshya Powertech shares will start trading on the NSE Emerge platform on October 23.

Freshara Agro Exports

After its initial public offering (IPO) closes on October 24, Freshara Agro Exports will be added to the list.

There will be a lot going on in the mainboard and SME IPO markets this coming week, and investors will have a lot of options in industries like chemicals, energy, infrastructure, and finance.

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Using Anchor Book, Waaree Energies Raises Rs. 1,277 Crore; IPO to Open on October 21

Anchor Investor Participation

In advance of its impending initial public offering (IPO), Waaree Energies, a well-known Mumbai-based producer of solar photovoltaic modules, successfully raised Rs 1,276.9 crore from 92 anchor investors on October 18. The Rs 4,321-crore initial public offering (IPO) subscription period is scheduled to begin on October 21 and end on October 23.

The IPO consists of an offer-for-sale (OFS) of 48 lakh shares valued at Rs 721.44 crore and a new issue of equity shares valued at Rs 3,600 crore. Chandurkar Investments and Waaree Sustainable Finance are the OFS’s selling shareholders.

The company’s public offering is off to a great start as it has concluded the distribution of 84,95,887 equity shares to anchor investors at a price of Rs 1,503 per share.

Participation from Leading Investors

Global financial behemoths like Morgan Stanley, Blackrock, Goldman Sachs, PGGM World Equity, Abu Dhabi Investment Authority, Eastspring Investments, BNP Paribas Funds, and Carmignac Portfolio were among the notable investors who took part in the anchor book. Significant interest was also shown by other important investors, including Pinebridge Global Funds, Florida Retirement System, Copthall Mauritius, and CLSA Global Markets.

The leading institutional investors on the domestic front were Aditya Birla Sun Life Trustee, Kotak Mahindra Mutual Fund, Franklin India, Mirae Asset, Motilal Oswal Mutual Fund, Quant Mutual Fund, HDFC Mutual Fund, and ICICI Prudential Mutual Fund. Other prominent investors through different schemes included Invesco India, Jupiter India Fund, Ashoka Whiteoak ICAV, Bandhan Mutual Fund, Sundaram Mutual Fund, PGIM India, and UTI Mutual Fund.

Waaree Energies demonstrated the significant interest from domestic institutional investors by allocating 28.31 lakh shares to 17 domestic mutual funds via a total of 45 distinct schemes.

Furthermore, a number of insurance companies—including HDFC Life, ICICI Prudential Life, Max Life, SBI General, SBI Life, Aditya Birla Sun Life, Bajaj Allianz Life, Kotak Mahindra Life, Reliance Nippon Life, and Tata AIA Life—invested in Waaree Energies through the anchor book. This widespread involvement indicates a high level of trust in Waaree’s future development.

Waaree Energies’ Expansion and Global Presence

The largest producer of solar photovoltaic modules in India, Waaree Energies, has an installed capacity of 12 GW as of June 2024—a considerable increase from 4 GW in FY22. The recent commissioning of a 1.3 GW solar module manufacturing facility in Noida, Uttar Pradesh, through its subsidiary, Indosolar, supports the company’s expansion. In Gujarat, Waaree also manages four other facilities.

Apart from its internal activities, Waaree Energies intends to broaden its worldwide reach by constructing a 1.6 GW solar photovoltaic module production plant in Texas, USA. With this facility, Waaree will have 3 GW of manufacturing capacity in the United States by FY26, with an additional 1.4 GW of capacity depending on market conditions. By FY27, the business hopes to have increased its overall capacity to 5 GW.

A new 6 GW solar ingot, wafer, cell, and photovoltaic module manufacturing plant would be established in Odisha with the net proceeds from the fresh issue (after deducting IPO charges). The remainder of the money will be used for basic business needs.

Financial Performance and Growth

In recent fiscal years, Waaree Energies has seen remarkable financial progress. The company’s earnings increased by a substantial 155% in FY24 to Rs 1,274.4 crore from Rs 500.3 crore in FY23. Its operating revenue increased significantly as well, rising from Rs 6,750.9 crore in FY23 to Rs 11,397.6 crore in FY24, or 68.8%.

Waaree recorded a profit of Rs 401 crore for the first quarterly period of FY25, an increase of 18.6% over the same time in the prior fiscal year. With revenue of Rs 3,408.9 crore for the quarter, there was a slight 2.4 percent year-over-year growth.

Currently, public shareholders possess the remaining shares of Waaree Energies, with promoters owning 71.8 percent of the company.

Price Band and Merchant Bankers

For the IPO, a price range of Rs 1,427 to Rs 1,503 per share has been determined. During the subscription period, investors are able to subscribe to the issue within this range.

Axis Capital, IIFL Securities, Jefferies India, Nomura Financial Advisory and Securities India, SBI Capital Markets, Intensive Fiscal Services, and ITI Capital are the merchant bankers in charge of overseeing the Waaree Energies initial public offering.

Summery

Waaree Energies is in a good position to profit from the rising demand for solar energy because of its solid financial performance, strong support from well-known domestic and international investors, and both. The company’s IPO is a noteworthy event in the market due to its expansion aspirations and leadership position in the Indian solar industry. Next week, when the offering goes on subscription, investors will be watching it intently.

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Anchor Investors and IPO Details: Deepak Builders & Engineers India Raises Over Rs 78 Crore from Anchor Investors; IPO Opens on October 21

On October 18, renowned infrastructure and construction firm Deepak Builders & Engineers India succeeded in raising Rs 78.01 crore from five major investors via its anchor book. This is a big milestone ahead of the company’s impending IPO, which is scheduled to begin accepting subscriptions on October 21.

Through the IPO, the business hopes to raise Rs 260.04 crore at the upper end of the pricing range, which is between Rs 192 and Rs 203 per share. The offer-for-sale (OFS) of 21.1 lakh shares, valued at Rs 42.83 crore, and a fresh issue of 1.07 crore equity shares, valued at Rs 217.21 crore, comprise the IPO. The OFS’s promoter, Deepak Kumar Singal, and his spouse, Sunita Singal, are among the selling stockholders.

Allocation of Shares to Anchor Investors

Deepak Builders announced the distribution of 38,42,939 equity shares to anchor investors at a price of Rs 203 per share in a filing to the stock markets. Strong interest from institutional investors is evident in this pre-IPO fundraising effort.

The largest anchor investor was Neomile Growth Fund, which bought 14.77 lakh shares for Rs 30 crore. Another big investor was Citadel Capital Fund, which paid Rs 20 crore for 9.85 lakh shares. In return for 13.8 lakh shares, other noteworthy investors Saint Capital Fund, Zeal Global Opportunities Fund, and Elite Capital Fund invested a total of Rs 28 crore.

Use of IPO Proceeds

Deepak Builders intends to strengthen its financial position by repaying its current debt with Rs 30 crore from the proceeds of the new offering. In addition, Rs 111.96 crore would be set aside to cover the working capital needs of the business. The remaining capital raised by the IPO will be put to general business uses so that the business can continue to grow and expand in the future.

Company’s Business and Current Projects

Deepak Builders & Engineers India is a Punjab-based company that specializes in managing engineering, procurement, and construction (EPC) contracts for a range of infrastructure and construction projects. The company had a healthy order book of Rs 1,380.4 crore as of June 2024. Sixty-six percent of these projects are in the railway sector, which is indicative of the company’s stronghold in this industry.

Twelve active projects are being worked on by Deepak Builders at the moment, comprising five item-rate or percentage-rate contracts and seven EPC contracts. The company is well-positioned to profit from India’s expanding infrastructure demands due to its concentration on infrastructure development and involvement in the railway industry.

Conclusion

With 78 crore already collected from anchor investors and a well-defined plan for allocating the IPO proceeds, Deepak Builders & Engineers India is well-positioned to have a big impact on the infrastructure and construction sectors. When the company starts its public offering for subscription on October 21 in an effort to raise a total of Rs 260.04 crore, investors are probably going to be closely monitoring the company.

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Afcons Infrastructure Files for Rs 5,430-Crore IPO, Set to Open on October 25

Key Highlights:

• IPO Size: Rs 5,430 crore
• Fresh Issue: Rs 1,250 crore
• Offer for Sale (OFS): Rs 4,180 crore
• Promoter Goswami Infratech’s stake to reduce post-IPO
• Date of IPO: October 25, 2024; closing date: October 29, 2024
• Significant interest from global and domestic investors

In anticipation of its impending initial public offering (IPO), Afcons Infrastructure, a renowned engineering and construction firm owned by the Shapoorji Pallonji Group, has submitted its Red Herring Prospectus (RHP) to the Registrar of Companies. With a public offering scheduled to begin subscriptions on October 25, 2024, and end on October 29, 2024, the company hopes to raise Rs 5,430 crore.

IPO Structure and Details

There are two parts to the Rs 5,430 crore IPO:

◊ New Equity Share Issuance: Afcons intends to issue new equity shares in order to raise Rs 1,250 crore.
◊ Offer for Sale (OFS): Goswami Infratech, a significant shareholder in the business, would sell shares valued at Rs 4,180 crore.

The issue’s pricing range will be revealed closer to the IPO date, probably the following week. Afcons will be able to acquire money through the IPO to fund a number of company needs, such as debt repayment, working capital requirements, and the acquisition of construction equipment.

Promoter Shareholding

Prior to the first public offering (IPO), Goswami Infratech held a 99 percent ownership in the business alongside fellow promoters Shapoorji Pallonji & Company, Floreat Investments, Hermes Commerce, and Renaissance Commerce. Because of the pre-IPO share transfers and OFS, Goswami Infratech’s stake will decrease to 53.52 percent following the IPO from 71.87 percent.

Pre-IPO Investments

Ahead of the IPO, Goswami Infratech transferred over 6.25 crore equity shares to a range of prestigious global and domestic investors through a pre-IPO round. This move attracted Rs 2,967.65 crore in investments, with investors acquiring shares at a price of Rs 463 per share.

Among the top investors were:

• Gamnat Pte (Singapore sovereign wealth firm GIC): 1.63 crore shares worth Rs 756 crore.
• Synergy Solutions Investments Holding: Rs 400 crore investment.
• Rs 400 crore invested by Enam Holdings: through Volrado Venture Partners Fund II.
• Quant Mutual Fund and 360 ONE: Rs 200 crore each.
• The Prudential Assurance Company and TIME Holdings: Rs 175 crore each.
• Discovery Global Opportunity (Mauritius): Rs 170 crore investment.

These strategic investments demonstrate strong confidence in Afcons’ growth prospects, bolstered by its robust portfolio of ongoing and completed projects.

Use of IPO Proceeds

Afcons Infrastructure plans to use the proceeds from the fresh issue (Rs 1,250 crore) as follows:

• Purchase of Construction Equipment: Rs 80 crore will be allocated to upgrading and expanding the company’s equipment base.
• Working Capital Requirements: Rs 320 crore will be utilized to meet long-term working capital needs, ensuring smoother project execution.
• Debt Repayment: Rs 600 crore will be used to repay outstanding debt, reducing the company’s financial burden and improving its balance sheet.
• General Corporate Purposes: Any remaining funds from the fresh issue will be used for general corporate activities, providing the company with additional financial flexibility.

Business Overview and Key Projects

Afcons Infrastructure is a prominent entity in the construction and engineering sector, specializing in expansive infrastructure undertakings. The company has a proven track record, having completed 79 projects across 17 countries since 2013, with a total project value of Rs 56,305 crore.

Afcons has 65 projects currently underway in 12 countries as of June 2024, with an order book totaling Rs 31,747 crore. This includes projects in sectors such as railways, roads, bridges, ports, and other key infrastructure domains.

Financial Performance

Afcons has demonstrated consistent financial growth. In FY24, the company recorded a net profit of Rs 449.7 crore, representing a 9.5 percent year-on-year increase from the previous fiscal year. Revenue from operations also grew by 5 percent, reaching Rs 13,267.5 crore in FY24, compared to Rs 12,636 crore in FY23.

In the first quarter of FY25, Afcons’ net profit rose by 0.7 percent year-on-year to Rs 91.6 crore, while its revenue stood at Rs 3,154.4 crore, a slight decline of 0.5 percent from the same period in FY24. Despite the slight dip in quarterly revenue, the company’s overall financial position remains strong, supported by a healthy order book and steady project execution.

Anchor Book and IPO Timeline

On October 24, 2024, the IPO anchor book will be open for business for a full day, giving institutional investors the opportunity to purchase shares ahead of the public offering. The final basis of allotment of shares will be decided by October 30, 2024, with equity shares being credited to the demat accounts of eligible investors by October 31, 2024.

On November 4, 2024, Afcons Infrastructure shares are anticipated to go up for public trading on the BSE and NSE.

Management and Promoter Holdings

With a 53.52 percent ownership in Afcons, Goswami Infratech will continue to be the biggest promoter following the IPO. Shapoorji Pallonji & Company, which owns a significant share in Afcons, will continue to play a pivotal role in the company’s operations.

In addition to the pre-IPO share transfers to institutional investors, Goswami Infratech sold 16.39 lakh equity shares, worth Rs 71.67 crore, to senior management employees and other individual investors at prices ranging between Rs 417 and Rs 463 per share.

Competitive Landscape

Afcons Infrastructure competes with several large players in the engineering and construction sector, including:

• Larsen & Toubro: A major competitor with extensive global operations.
• KEC International: Known for its engineering expertise, particularly in power transmission and infrastructure.
• Kalpataru Project International: Another competitor in the infrastructure development sector.
• Dilip Buildcon: A company known for its road construction and infrastructure projects.

Afcons’ large order book and ongoing international projects provide it with a competitive edge, positioning the company for future growth in the infrastructure domain.

Lead Managers for the IPO

The book-running lead managers overseeing Afcons Infrastructure’s IPO are:

• ICICI Securities
• DAM Capital Advisors
• Jefferies India
• Nomura Financial Advisory and Securities (India)
• Nuvama Wealth Management
• SBI Capital Markets

These firms are responsible for managing the public issue, ensuring compliance, and facilitating the smooth execution of the IPO process.

Conclusion

Afcons Infrastructure’s upcoming IPO has garnered significant attention from both domestic and global investors, reflecting confidence in the company’s growth trajectory and robust project pipeline. With its strong financial performance, extensive order book, and strategic use of IPO proceeds, Afcons is well-positioned to continue playing a leading role in India’s infrastructure development.

Investors will closely watch the IPO when it opens on October 25, 2024, as the company seeks to raise Rs 5,430 crore to fuel its growth, repay debt, and strengthen its balance sheet. The strong participation in the pre-IPO round from marquee investors further underscores the confidence in Afcons’ long-term prospects.

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