​Active Infrastructures IPO: Subscription Status, GMP, and Key Details​

Active Infrastructures Limited has launched its Initial Public Offering (IPO) with a plan to raise ₹78 crore via the issuance of 43 lakh fresh equity shares. Its Active Infrastructures IPO opened for subscription on March 25 and ended on March 21. The company has a fixed price band at ₹178-181 per equity share offered through the FPO, with a minimum lot of 600 shares.

About Active Infrastructures

Active Infrastructures Limited was set up in 2007 and is a civil construction company dealing with infrastructure projects all over India. The company is well known for the execution of large scale projects and the contribution towards the national infrastructural development.

IPO Subscription Status

The IPO received 1.05 times subscription by the end of the subscription period on March 25. Higher engagement was recorded in the retail portion, while institutional as well as non-institutional participating investor levels were moderate. ​

Grey Market Premium (GMP)

The opening of the IPO had NIL as the Grey Market Premium (GMP) of Active Infrastructures IPO, suggesting that the sentiment in the unlisted market is neutral. ​

Use of Funds

The capital that will be raised from the IPO will be put to a few purposes.

• The Working Capital Requirements: The funds of about ₹38.98 crore worth (50.08 % of the total funds) will be dedicated to the day to day operational expenses. This infusion will ensure that it will improve liquidity and facilitate seamless execution of the ongoing and upcoming projects.
• Part of ₹16.72 crore (21.48%) has been allocated for repayment or prepayment of certain borrowings. Reduction in debt obligations will improve the company’s financial health and lower the interest expense.
• Capital Expenditure: Purchase of new construction equipment is proposed at an allocation of ₹7.05Cr (9.06%). It will also enable the company to expand its asset base to take on more complex and large scale infrastructure projects.
• Remaining ₹15.08 crore (19.38%): Various corporate uses including administrative expenses and strategic initiatives are part of this. This flexibility provides a bigger picture in the overall business growth and the operational efficiency.

Allotment and Listing Dates

The allotment of shares is to be completed by March 26. The Demat accounts of successful applicants can expect shares to be credited from March 27. The giorno shares are to be listed on the NSE SME platform on marzo 28.

Market Impact and Industry Outlook

This is expected to strengthen the Active Infrastructures position in the construction and infrastructure sector as the company is entering in the public market. It is expected that the infusion of capital will enable the firm to develop project execution capabilities (which it may be currently lacking), thereby increasing its potential market share. Increased competition among the competitors may cause them to focus on innovating and being efficient so as to remain in the same rankings.​

Conclusion

The company is a major player in the industry and Active Infrastructures Limited IPO is going to come as the next big step in the company’s growth trajectory. Despite the cautious sentiment in the market evidenced by the slow subscription figures and low GMP, the focus on debt reduction and expansion strategy indicates that the company is well prepared for future growth. The performance of the company post-listing will be watched closely by its investors and industry stakeholders as a means by which to judge the overall effect on the infrastructure sector.