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The Afcons Infrastructure Initial Public Offering (IPO) successfully debuted on the stock market on November 4th, following a subscription period that concluded on October 29th. The IPO, which aimed to raise ₹1,621 crore, saw a final subscription rate of 2.63 times, indicating strong investor interest. This positive response was fueled by a robust subscription from non-institutional investors, who subscribed at a rate of 5.05 times, while qualified institutional buyers (QIBs) reserved portion was booked at 3.79 times. The retail segment, however, witnessed a lower subscription rate of 94%.
Despite facing challenges during the first two days of bidding, with subscription reaching only 10% on the inaugural day and 36% on the second day, the IPO managed to gather momentum towards the end. The company attributed this turnaround to the strong demand from non-institutional investors, particularly those participating in the Offer for Sale (OFS) portion of the IPO. The OFS, a key component of the IPO, involved the promoter, Goswami Infratech, selling a portion of its existing shares, offering investors an opportunity to gain exposure to the company's future prospects. The IPO's success can be attributed to the positive investor sentiment regarding Afcons Infrastructure's potential for growth, driven by its expertise in infrastructure projects.
While the IPO garnered a decent subscription rate overall, the grey market premium (GMP) – an unofficial indicator of the expected listing price – pointed towards a potential listing gain. The GMP hovered around ₹1 on the day of listing, suggesting that investors were willing to pay a slight premium for Afcons Infrastructure shares. This premium, however, was significantly lower than the expected gains in other recent IPOs, potentially reflecting a cautious approach by investors due to factors like the ongoing market mood and the parent company's debt situation. The lower than expected subscription figures and the parent company's financial challenges led some experts to predict a flat listing performance, with a potential for a negative listing, which could present an opportunity for long-term investors to accumulate shares on the first day of listing.