SP Group’s Construction Arm Files Draft for Rs 7,000-cr IPO

30 Mar 2024

In June 2023, sources had told FE that Afcons Infrastructure was looking to raise funds through an IPO, which would be used to reduce debt and expansion plans.

Through an initial stake sale of shares. The firm intends to use the proceeds to pare debt and for its general capital expenditure needs, amongst others.

The initial public offering (IPO) would be through an issuance of fresh shares of Rs 1,250 crore and an offer for sale (OFS) of up to Rs 5,750 crore by Goswami Infratech, an SP Group firm, according to the draft red herring prospectus (DRHP) filed with Sebi.

Ahead of the IPO, the firm intends to raise about Rs 250 crore through a preferential issue or other methods. If such a placement is completed, the size of the fresh issue will be reduced to such extent, it added.

As per the DRHP, Goswami Infratech holds a 72.35% in Afcons Infrastructure, Shapoorji Pallonji and Company holds a 16.64% stake, Floreat Investments holds 8.12%, Hermes Commerce 1.19% and Renaissance Commerce a 1.18% stake.

In June 2023, sources had told FE that Afcons Infrastructure was looking to raise funds through an IPO, which would be used to reduce debt and expansion plans.

As per the DRHP, the company intends to use Rs 500 crore to repay certain debt, Rs 350 crore to fund long-term working capital requirements and Rs 150 crore for capital expenditure. As of December 2023, its outstanding borrowings stood at Rs 2,887.59 crore.

ICICI Securities, DAM Capital Advisors, Nomura, Jefferies India, Nuvama Wealth Management and SBI Capital are the lead managers for the issue.

SP Group is the single largest stakeholder in Tata Sons, the investment-holding arm of all Tata Group companies, and is controlled by billionaire Shapoor Mistry.

Mumbai-based Afcons Infrastructure is a closely-held company, with presence in road construction, general civil engineering works, offshore oil and gas, among others. The firm also owns land parcels, including in Karnataka, through its arms.

On Tuesday, SP Group entered into a deal to sell its 56% stake in Orissa’s Gopalpur Port (GPL) to Adani Ports and Special Economic Zone, marking its second port divestment in the last few months. It had earlier divested Dharamtar Port, which the group had acquired in 2015, to JSW Infrastructure for an enterprise value of Rs 710 crore.

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