In a Conservative Pitch to Investors, Afcons says focus on high-margin EPC projects
₹32,556 crore as on 31 December 2023, as per Icra, which has an active credit rating on the company. This is about 2.6 times the company’s FY23 revenue of ₹12,637 crore.“The ratings for Afcons Infrastructure Limited continues to favourably factor in the longstanding track record of its operations in executing complex infrastructure projects, its large scale of operations, diversified order book across segments, clientele and geographies," analysts at Icra noted in a report dated 27 March.
The rating agency retained an A+ rating with a stable outlook for the company’s long-term loans while enhancing the amount.About 68% of the company's business comes from government contracts, while 22% comes from multilateral contracts and 10% from the private sector. Geographically, about 30% business comes from overseas while the rest domestic.Afcons will be raising ₹7,000 crore through its planned public offer, of which ₹5,750 crore will be through a secondary sale of shares by promoter Goswami Infratech and the rest through fresh issue of shares.The IPO will be crucial for the promoter company to manage its high debt load.
The company’s net debt stood at ₹21,403 crore as of 31 September 2023, as per its draft red herring prospectus.In fact, one of the key reasons for the public market debut of Afcons is for the promoters to raise capital.Also read | L&T, Afcons, JSW vie for Nicobar projectThe ₹1,250 crore of fresh equity capital planned to be raised by the company, meanwhile, will help increase its net worth, thereby increasing the value of bank guarantees it can avail, the two top executives said. The company needs to furnish such guarantees to win EPC contracts, especially government projects.Afcons plans to utilize ₹500 crore of
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