Active Infrastructures IPO Listing: Stock lists flat on NSE SME
Active Infrastructures IPO Listing
Active Infrastructures IPO Listing: Modest Performance After Flat Entry, Retail Investors’ Allocation Left Unfilled
The much-awaited initial public offering (IPO) of Active Infrastructures, a civil construction company, opened for subscription between March 21 and March 25, 2025, with a target of raising Rs 77.83 crore.
However, despite the company’s expansion plans and positive financial growth, the listing did not impress market participants.
The IPO shares were listed on the National Stock Exchange (NSE) SME platform today, but they saw a muted performance, reflecting investor caution and a lack of substantial demand from retail investors.
Lackluster Interest from Retail Investors
One of the most notable takeaways from this IPO is the tepid response from retail investors.
Despite the overall subscription rate standing at 1.05 times, the portion reserved for retail investors saw only a 0.57 times subscription rate, indicating that fewer retail investors were willing to participate in this offering.
This under-subscription in the retail category was a red flag, considering that retail investors often provide much-needed support for IPOs, especially for smaller companies listed on the SME segment.
In contrast, the qualified institutional buyers (QIB) segment was fully subscribed at 1 time, while the non-institutional investors (NII) category saw a more robust subscription rate of 1.66 times, showing a relatively stronger interest from larger institutional players.
However, despite this interest from institutional investors, the IPO’s flat listing and the muted retail response suggest a cautious outlook for the company as it navigates public market scrutiny.
Listing Performance: No Listing Gains for IPO Investors
When the shares of Active Infrastructures started trading today, they were listed at the issue price of Rs 181, the same price at which they were offered to investors.
This flat listing meant that IPO investors did not enjoy any immediate listing gains, a scenario that is often disappointing for those who had hoped for quick profits upon listing.
In the initial moments of trading, Active Infrastructures’ shares touched a marginal high of Rs 181.40, giving the impression of a slight upward movement.
However, the optimism quickly waned as the stock price began to slip. The shares eventually fell to a low of Rs 171.95, reflecting a decline of nearly 5%.
By the close of the trading day, the stock had recovered somewhat but still ended lower than the issue price, closing at Rs 175.60. This represents a loss of 2.98% for investors who subscribed at the issue price of Rs 181.
Such a flat or negative listing performance is not uncommon for SME IPOs, but it does raise concerns about the overall demand for the company’s shares in the secondary market.
Investors, especially those from the retail category, who had expected a positive listing gain, found themselves facing a loss on the first day.
How Will the IPO Proceeds Be Utilized?
The Rs 77.83 crore raised through the IPO is critical for Active Infrastructures as it aims to bolster its operations and reduce its debt burden. The company has outlined a clear plan for how it intends to allocate the funds:
- Working Capital (Rs 38.98 crore): The largest portion of the funds, nearly 50% of the raised capital, will be used to fund the company’s working capital needs. This indicates that Active Infrastructures intends to strengthen its day-to-day operations and ensure that it has the liquidity required for ongoing construction projects.
- Debt Repayment (Rs 16.72 crore): Active Infrastructures also plans to use a portion of the funds to reduce its existing debt. Reducing the financial burden of debt repayment is crucial, especially for a construction company, as it allows more cash flow to be reinvested into the business rather than servicing interest expenses.
- Purchase of Construction Equipment (Rs 7.05 crore): A further Rs 7.05 crore will be allocated towards acquiring new construction equipment, which is essential for maintaining and expanding the company’s operations. As the company undertakes more complex and large-scale infrastructure projects, modern and efficient equipment will be pivotal to ensuring timely project delivery and maintaining competitiveness.
- General Corporate Purposes: The remaining funds will be used for general corporate needs, which might include expanding operational capacity, marketing, or other strategic initiatives that could enhance the company’s market position.
These fund allocations demonstrate Active Infrastructures’ focus on strengthening its financial health and operational capacity, but it remains to be seen how effective these investments will be in driving future growth, particularly in the face of a lackluster market response.
A Glimpse into Active Infrastructures’ Business and Financial Health
Founded in 2007, Active Infrastructures is a well-established player in India’s civil construction sector.
The company specializes in the construction of roads, bridges, water supply systems, and irrigation projects.
In addition, it has a diversified portfolio that includes office complexes, retail centers, exhibition halls, and educational institutions.
The company operates in Maharashtra, Madhya Pradesh, Uttar Pradesh, and Tripura, giving it a wide geographic footprint within the Indian infrastructure development sector.
Financially, Active Infrastructures has shown significant growth over the past few years, albeit from a small base.
The company’s net profit rose dramatically from a modest Rs 9 lakh in fiscal year 2022 to Rs 9.87 crore in 2023.
The net profit further increased to Rs 10.45 crore in 2024, demonstrating a steady upward trajectory in profitability.
During the same period, the company also saw substantial growth in revenue, which surged at a compound annual growth rate (CAGR) of over 836%.
In fiscal year 2024, Active Infrastructures’ total revenue stood at Rs 97.43 crore, up from a much smaller base in previous years.
This sharp growth in both revenue and profit is indicative of the company’s expanding presence and operational scale within the infrastructure sector.
For the ongoing financial year 2024-25, Active Infrastructures has already recorded a net profit of Rs 5.55 crore, with revenue of Rs 33.9 crore in the first half of the year (April-September 2024).
This highlights the company’s ongoing ability to generate profits and maintain a steady growth trajectory in the face of an evolving market landscape.
Final Remarks: A Cautious Outlook for Active Infrastructures
While Active Infrastructures has demonstrated strong financial performance over the last few years, its IPO debut was far from spectacular.
The flat listing, coupled with the weak retail response, signals that investors remain cautious about the company’s prospects, particularly in the short term.
Furthermore, the company’s lack of immediate listing gains could dampen investor confidence, especially among those looking for quick returns.
However, Active Infrastructures remains a fundamentally strong company with a solid track record in the civil construction sector and a promising growth trajectory.
If it can effectively use the funds raised through the IPO to strengthen its operations and execute its expansion plans, it could potentially see improved performance in the coming quarters.
For now, though, the company will need to regain investor confidence and prove that it can deliver consistent returns over the long term.
