Afcons Infrastructure IPO vs. Godavari Biorefineries IPO: Which is the Better Subscription Choice?
Afcons Infrastructure IPO vs. Godavari Biorefineries IPO: Two totally diverse industries with apparently different investment opportunities have thrown open their Initial Public Offerings Afcons Infrastructure and Godavari Biorefineries. Godavari Biorefineries' IPO is closing today, Friday, October 25, while Afcons Infrastructure's is open till Tuesday, October 29. While both are vastly different in size and industry, analysts still prefer Afcons Infrastructure over Godavari Biorefineries due to the massive market presence coupled with infrastructure development success.
Afcons Infrastructure IPO: An Overview
Afcons Infrastructure Ltd, the engineering infrastructure firm under Shapoorji Pallonji Group, launched an initial public offering (IPO) Wednesday. The IPO comprised a fresh issue of ₹5,430 crore: fresh issue of ₹1,250 cr and offer for sale (OFS) by promoters for ₹4,180 crore. "The funds raised through the issuance of equity shares and fresh issue portion would be used for machinery acquisition, working capital, debt reduction, and corporate expenses," said the entity at ₹440-463 per share. Perhaps what stands out from Afcons' experience in complex engineering projects, be it the Atal Tunnel or the Chenab River railway bridge, is its operational expertise in hostile environments.
Kejriwal Research and Investment Services's Arun Kejriwal said: "Afcons has a wonderful history of finishing most demanding infra projects ahead of time, so it looks promising about both short-term returns and long-term upsides from an IPO price.". Mehta Equities's Rajan Shinde believes Afcons enjoys a great reputation in the space of marine, transportation, and urban infrastructure projects and has a long-term association with global clients such as Arcelor Mittal and Reliance Industries. With a significant order book and high revenue visibility, Shinde suggests it for long-term infrastructure investment for investors.
Godavari Biorefineries IPO: Overview
Godavari Biorefineries IPO comprises a fresh equity share issue of ₹325 crore and an OFS priced at ₹230 crore. Offer at a price band of ₹334-352, Godavari aims to deploy the proceeds mainly towards repayment/de-fructification of debt and other general corporate purposes. This diversified bio-based chemical, ethanol, and sugar producer has multiple revenue streams that contribute perfectly even to its portfolio, and bio-based chemicals have great growth potential.
Despite these strengths, Kejriwal feels that Godavari Biorefineries does not have scale and growth potential that Afcons has. The current valuation and capacity do not attract investors much since the attractiveness of bio-refineries is competitive in nature. This balanced portfolio is promising but does not have the same kind of growth trajectory seen in the infrastructure sector.