Afcons Infra to Launch ₹54,300 Million Initial Public Offering (IPO)

Key Takeaways from Afcons IPO

• Afcons Infrastructure Limited is launching an IPO worth up to ₹54,300 million.
• The fresh issue aims to raise ₹12,500 million; offer for sale expected to garner ₹41,800 million.
• Reservations include allocations for employees, QIBs, NIIs, and RIIs.

The fresh issue aims to raise up to ₹12,500 million, while the offer for sale is expected to garner up to ₹41,800 million. The equity shares from this IPO will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

The tentative dates for the Nirmaan IPO have been announced. The bidding process will open on Friday, October 25, 2024, and will close on Tuesday, October 29, 2024. Following the closure, the finalisation of the basis of allotment with the designated stock exchange is expected to occur on or about Wednesday, October 30, 2024. Refunds for anchor investors, if applicable, along with the unblocking of funds from ASBA accounts, will be initiated on or about Thursday, October 31, 2024. Additionally, credit of equity shares to the demat accounts of allottees is anticipated on the same day. Trading of the equity shares on the stock exchanges is expected to commence on or about Monday, November 4, 2024.

The proceeds from the fresh issue will be utilized for various purposes including capital expenditure for purchasing construction equipment (₹800 million), funding long-term working capital (₹3,200 million), prepayment or scheduled repayment of borrowings (₹6,000 million), and general corporate purposes.

In terms of reservations for the IPO, the employee reservation portion is set at up to ₹250 million. The allocation for Qualified Institutional Buyers (QIBs) will not exceed 50% of the net offer. Non-Institutional Investors (NIIs) are allocated no less than 15% of the net offer, while Retail Individual Investors (RIIs) will receive at least 35% of the net offer. The minimum bid lot for the IPO will be announced two working days before the bid/offer opening date.

About Afcons Infrastructure Limited

Established in 1959, Afcons Infrastructure Limited is one of the leading infrastructure engineering and construction companies under the Shapoorji Pallonji Group, having expertise across six decades. The company operates globally across Asia, Africa, and the Middle East with five major infrastructure business verticals. Its marine and industrial projects cover ports, harbour jetties, dry docks, and liquefied natural gas tanks. The surface transport segment is dedicated to highways, railways, and mining infrastructure. Urban infrastructure includes elevated and underground metro works, bridges, and flyovers. Hydro and underground projects are mainly related to dams, tunnels, and irrigation systems. Finally, the oil and gas division caters to both offshore and onshore projects.

Key Takeaways from the Share Price Drop

• AMFL has been instructed to stop loan disbursements starting October 21, 2024, due to concerns with its pricing and lending practices.
• Manappuram Finance shares dropped by 15% as a direct result of the RBI's order.
• Manappuram Finance has committed to swift corrective actions, including a comprehensive review of governance and regulatory compliance.
• AMFL will still service existing customers and manage recoveries despite the restrictions.

The RBI has ordered AMFL to cease and desist from sanctioning or disbursing loans effective from the close of business on October 21, 2024, citing violations related to its pricing policies and lending rates.

The central bank found material supervisory concerns with AMFL’s Weighted Average Lending Rate (WALR) and its Interest Spread, which were deemed excessive and not in compliance with RBI’s regulatory guidelines. These findings were also deemed non-compliant with the Fair Practices Code. Despite these restrictions, AMFL is allowed to continue servicing existing customers and perform collection and recovery operations. 

Following this announcement, the company issued a press release on the same day stating that it values the feedback from the RBI and said, “We value the feedback provided by the honourable Reserve Bank of India and take on record the improvement areas suggested for Asirvad Microfinance. This matter has been immediately brought to the notice of our board and a meeting has been convened urgently to take immediate action. The Board has reiterated its unwavering commitment to implement RBI’s direction in letter and spirit and monitor the corrective action in a time bound plan. Additionally, the Board is committed towards ensuring continued and robust customer service support to our existing customers and we are sure that our actions will demonstrate our alignment to a ‘compliance first’ culture. We take these matters with utmost seriousness, and we will remedy not only every observation made by the honourable Reserve Bank of India but will do a comprehensive review of the overall enterprise wide governance, risk management and regulatory compliance. We are working on a detailed plan and will submit the same to the honourable Reserve Bank of India within the stipulated timelines.” 

About Manappuram Finance Limited

Manappuram Finance is a Non-Banking Finance Company (NBFC) that offers a diverse range of financial services, including gold loans and money exchange facilities. As a Systemically Important Non-Deposit taking NBFC (NBFC-ND), the company plays a significant role in the financial sector, providing both fund-based and fee-based services.

Key Takeaways from Adani Energy Financial Performance:

• Adani Energy Solutions reported a PAT of Rs 773 crore in Q2 FY25, up 172% year-on-year; adjusted PAT reached Rs 459 crore, a 61.6% increase.
• Total income rose to Rs 6,360 crore, reflecting a 68.9% growth, with EBITDA climbing 31% to Rs 1,891 crore.
• The company secured three new transmission projects, boosting its under-construction pipeline to approximately Rs 27,300 crore.
•  AESL was ranked 2nd in the Energy and Mining Sector by Businessworld for its commitment to sustainability.

Total income for the quarter reached Rs 6,360 crore, reflecting a 68.9% increase, while EBITDA grew by 31% to Rs 1,891 crore. The company secured three new transmission projects, expanding its under-construction pipeline to approximately Rs 27,300 crore.

AESL reported a 7% increase in energy sales in its Mumbai distribution business, contributing to the overall robust performance. The company has also divested its Dahanu thermal plant in line with its ESG commitments. 

Kandarp Patel, CEO of AESL, expressed satisfaction with the company's operational performance and highlighted its commitment to sustainable practices. The firm was recognised by Businessworld as one of India's Most Sustainable Companies, ranking 2nd in the Energy and Mining Sector.

About Adani Energy Solutions Limited:

Adani Energy Solutions Limited (AESL), part of the Adani Group, operates across various sectors in the energy industry, including power transmission, distribution, smart metering, and cooling solutions. As the largest private transmission company in India, AESL spans 16 states with a cumulative transmission network of 23,269 circuit kilometres and a transformation capacity of 70,686 MVA. In its distribution segment, AESL serves over 12 million customers in metropolitan Mumbai and the Mundra SEZ. 

The company is expanding its smart metering business and aims to become India’s top integrator in this field, boasting an order book of over 22.8 million metres. Through its integrated approach, AESL is enhancing its distribution network with parallel licences and offering competitive, customised retail solutions that include a significant portion of green energy. This positions AESL as a key player in transforming the energy landscape to ensure reliable, affordable, and sustainable energy delivery to consumers.

Key Takeaways from Union Bank’s Financial Performance:

• Union Bank of India’s net profit rose 34.41% YoY to Rs 4,719.74 crore in Q2 FY25.
• Total income increased 13.27% to Rs 32,036.46 crore, but net interest income slightly decreased to Rs 9,047 crore.
• Gross NPA decreased to Rs 40,499 crore, with the gross NPA ratio improving to 4.36%.
• Deposits grew 9.17% YoY to Rs 12,41,947 crore, and the capital adequacy ratio improved to 17.13%.

However, net interest income (NII) fell slightly to Rs 9,047 crore, down from Rs 9,126 crore in Q2 FY24. The net interest margin (NIM) also decreased to 2.90% from 3.18% the previous year. Operating profit increased by 12.35% to Rs 8,113 crore from Rs 7,221 crore a year earlier.

Total provisions for the quarter were Rs 3,393 crore, which is down 8.52% year-on-year but up 17.36% from the previous quarter. The bank's gross non-performing assets (NPA) stood at Rs 40,499 crore as of September 30, 2024, down from Rs 54,012 crore a year earlier. The gross NPA ratio improved by 202 basis points to 4.36%, while the net NPA ratio decreased by 32 basis points to 0.98%.

Deposits increased by 9.17% year-on-year to Rs 12,41,947 crore, and global advances rose by 9.63% to Rs 9,28,832 crore. The bank's return on assets was 1.35%, and the return on equity was 19.10% for Q2 FY25. Additionally, the capital adequacy ratio (CRAR) improved to 17.13% from 16.69% a year earlier, and the CET-1 ratio rose to 13.88% from 13.05%.

About Union Bank of India:

Union Bank of India is a prominent public sector bank in India, with the Government of India owning 74.76% of its total paid-up capital. Established on November 11, 1919, and headquartered in Mumbai, the bank amalgamated Andhra Bank and Corporation Bank on April 1, 2020. It boasts a vast network of over 8,500 domestic branches, more than 9,100 ATMs, and employs over 74,000 staff, along with 21,000 Business Correspondents, ensuring a strong presence across all states and union territories.

As of June 30, 2024, Union Bank's total business reached Rs 21,36,405 crore, with deposits of Rs 12,24,191 crore and advances of ₹ 9,12,214 crore. The bank operates two overseas branches in Dubai and Sydney, alongside a banking subsidiary in London and a joint venture in Malaysia. Notably, Union Bank was the first large public sector bank in India to implement a 100% core banking solution and has earned numerous awards for its achievements in technology, digital banking, financial inclusion, MSME support, and human resource development.