Afcons IPO: Shapoorji Pallonji subsidiary in talks with banks for offering

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Afcons IPO: Shapoorji Pallonji subsidiary in talks with banks for offering

In an effort to meet payment commitments and alleviate financial obligations, Afcons, the renowned Shapoorji Pallonji group’s subsidiary, has commenced discussions with banks regarding its potential initial public offering (IPO), known as the Afcons IPO. According to insiders familiar with the matter, Afcons aims to monetize its assets and fulfill loan covenants made with its financiers, as reported by the esteemed Economic Times (ET).

While Afcons had initially planned to go public in 2007, the group postponed the IPO due to the volatility observed in the real estate and construction markets at the time. As per the ET report, the company is also considering a strategic sale, exploring options such as engaging with Middle East-based firms. These alternatives aim to secure capital and facilitate the repayment of debts accumulated by the group’s operating companies. Additionally, this approach would help alleviate the financial strain on the promoter holding companies, which have been actively seeking funds to settle company loans, states the ET news report.

According to ET, SP Group, the investment holding firm, intends to raise an estimated ₹5,000-6,000 crore through the monetization of Afcons within the next six months. However, as of the time of publication, SP Group has yet to respond to the inquiries made by ET via email.

Shapoorji Pallonji and Company Limited (SPCPL), the flagship firm of the group, encompasses various sectors such as construction, shipping, and real estate. Promoted by the Mistry family, SPCPL holds an 18% share in Tata Sons through its investment holding companies.

SPCPL currently carries a debt of approximately $3 billion, which has been restructured as part of a Covid relief scheme.

Notable Projects Executed by Afcons:

Among Afcons’ notable achievements, it has successfully completed projects such as the Ahmedabad Metro and the Atal Tunnel in Rohtang, Himachal Pradesh. These projects demonstrate the company’s expertise in complex metro rail and tunnelling endeavors.

Moreover, the parent company of SPCPL is also involved as one of the contractors working on the prestigious Central Vista project, which entails the renovation of government buildings in the national capital. Prime Minister Narendra Modi personally oversees this high-profile initiative.

Also Read: All IPOS NEWS

According to sources and public documents cited by ET, the Mistry family’s investment holding firms and affiliated entities have secured loans amounting to approximately $3 billion over the past two years. These loans have been obtained from banks and credit funds, utilizing Tata Sons shares as collateral.

About Afcons:

Afcons Infrastructure, a member of the Shapoorji Pallonji Group, is renowned for its expertise in extreme engineering and construction. It holds a prominent position among India’s leading infrastructure development companies and ranks within the top 10 globally in the field of marine infrastructure.

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