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  5. Afcons Infrastructure IPO subscribed 34% on Day 2: Here’s a snapshot of peer-to-peer comparison

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Afcons Infrastructure IPO subscribed 34% on Day 2: Here’s a snapshot of peer-to-peer comparison

Upstox
By Upstox News Desk

4 min read | Updated on October 28, 2024, 16:38 IST

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SUMMARY

Shapoorji Pallonji Group’s Afcons Infrastructure handling 65 major EPC projects across 12 countries, valued at ₹31,747 crore, with projects in Asia, Africa, and the Middle East., is planning its IPO, which will be held from October 25 - 29, 2024. In the infrastructure and construction space, Afcons Infrastructure competes with Larson & Toubro, KEC International, Kalpataru Project International and Dilip Buildcon.

Peer comparison between Afcons Infra and other listed infrastructure companies:

Peer comparison between Afcons Infra and other listed infrastructure companies:

Afcons Infrastructure Limited (AIL), an infrastructure engineering and construction company owned by the Shapoorji Pallonji Group launched its IPO on Friday and has recieved weak response till now. The overall IPO is subscribed 34% as weak market mood dampened investor sentiments.

Afcons Infrastructure is the flagship infrastructure engineering and construction company of the Shapoorji Pallonji group. The company has a strong track record of executing numerous technologically complex engineering, procurement and construction (“EPC”) projects both within India and internationally. According to the Fitch Report, they are one of India’s largest international infrastructure construction companies, as per the 2023 ENR (Engineering News-Record, US) Top International Contractors rankings, based on International Revenue for the Financial Year 2023. As of June 30, 2024, the company is actively working on 65 projects across 12 countries and has a total order book value of ₹31,747 crore.

Afcon Infrastructure's key competitors across business verticals include Larson & Toubro (L&T), KEC International (KEC), Kalpataru Project International (KPIL) and Dilip Buildcon (DBL). As per the offer document, the company has listed all of the above as its peers.

Here's peer comparison between Afcons Infra and other listed infrastructure companies:
Name of the CompaniesMarket Cap (in ₹ crore)CMP (in ₹)FY24 Revenue from (₹ crore)*Operating Profit Margin (%)ROCE(%)Debt to Equity RatioP/E
Afcons Infrastructure Limited (Company)*17,026NA13,26810%23.10%0.9437.2
Listed Peers
Larsen & Toubro (L&T) (Consolidated)4,73,6793,4592,21,11314%13.40%1.3535.6
KEC International24,79493919,9147%16.00%0.9763.2
Kalpataru Project International9,9481,24019,6269%16.00%0.7841.6
Dilip Buildcon (DBL)7,01248012,01212%10.50%1.7141.4
(Source- Screener.in, Offer Document)
Larsen & Toubro (L&T) - Larsen & Toubro Ltd is a multinational conglomerate providing engineering, procurement and construction (EPC) solutions in key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology and Financial Services in domestic and international markets. The Company in FY24 reported revenue of ₹2,21,113 crore on a consolidated basis Net Profit on a consolidated basis stood at ₹15,547 crore. In Q1FY25 the company had an order book of ₹4,90,900 crore.
KEC International (KEC) - KEC International is a global infrastructure EPC major. It has presence in the verticals of Power Transmission and Distribution, Railways, Civil, Urban Infrastructure, Solar, Oil & Gas Pipelines, and Cables. It is the flagship Company of the RPG Group. As of June 30, 2024, the company has consolidated an order book of ₹32,715 crore.

In FY24, KEC International’s consolidated Operating Profit increased by an impressive 47.06%, reaching ₹1,353 crore while revenue jumped by 15.22% to ₹19,914, and profit also doubled with growth of 97.15%, reaching ₹347 crore.

Kalpataru Project International - Kalpataru Power Transmission Ltd is a global EPC player with diversified interests in power transmission and distribution, oil and gas pipelines, railways and biomass-based power generation. As of June 30, 2024, the company holds a strong order book of ₹57,195 crore.

In FY24, Kalpataru Project International saw revenue growth of 19.95%, reaching ₹19,626 and net profit jumped by 18.62% to ₹516.

Dilip Buildcon (DBL) - Dilip Buildcon Limited, incorporated in 2006, is presently in the business of development of infrastructure facilities on Engineering Procurement and Construction basis (EPC) and undertakes contracts from various Government and other parties and special purpose vehicles promoted by the Company.

The current order book of the company stands at ₹18,600 crores, including ₹2,400 crores from coal MDOs, which will contribute to an estimated revenue of ₹5,500 crores over three years. In Q1FY25, company’s revenue decreased by 9.61% YoY, from ₹2,609 crores to ₹2,358 crores, attributed to lower revenue from roads and highway business. Operating EBITDA dropped by 21.62% YoY, from ₹335 crores to ₹262 crores, resulting in a margin contraction. Profit after tax fell by 43.17% YoY, from ₹83 crores to ₹47 crores.

Conclusion

The enterprise is the main construction firm under the Shapoorji Pallonji group and has well-diversified activities with approximately 30% of the revenues coming from exports. It marked steady growth in its top and bottom lines for the reported periods. Its revenues came 30% from exports as by the end of September 30, 2024 their order book was positioned at ₹40,000 crore. Many investors are likely to be interested in the IPO owing to the prospects of the sector and the government's investments in the country's infrastructure development.

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