| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 850 to ₹ 900 | 16 | 19th Aug, 2024 – 21st Aug, 2024 | ₹600.29 Cr |
About Interarch Building Products Ltd IPO
Interarch Building Products Ltd. is one of the leading providers of turnkey pre-engineered steel construction solutions in India. Incorporated in 1983, the company has over 30 years of experience in the pre-engineered steel buildings (PEB) industry with its brands “TRAC” and “TRACDEK”. The extensive experience has allowed the company to evolve into a comprehensive PEB solution provider, building a strong track record through deep customer insights gained over the years. The company boasts comprehensive facilities that encompass design and engineering, manufacturing, and on-site project management for the installation and erection of PEBs. The company is ranked third among integrated PEB players in India in terms of operating revenue from PEB business in FY23. Additionally, it
holds the second largest installed capacity at 141,000 MTPA (as of 31st March 2024) and commands a 6.5% market share in terms of operational income for FY24 among integrated PEB players in India. Interarch custom designs, engineers, and fabricates PEBs for industrial, infrastructure, and building applications. They have delivered projects for e-commerce warehouses, paint production lines, FMCG manufacturing units, indoor stadiums, and the cement industry. The company offers PEBs through two main channels. The first is PEB Contracts, where the company provides complete turnkey solutions, including on-site project management for the installation and erection of PEBs at customer sites. The second is PEB Sales, which involves the direct sale of pre-engineered steel building materials to customers. The company primarily produces its products in-house at four manufacturing facilities: two in Sriperumbudur, Tamil Nadu, and one each in Pantnagar and Kichha, Uttarakhand. Additionally, Interarch has three dedicated design engineering centers in Noida, Uttar Pradesh; Chennai, Tamil Nadu; and Hyderabad, Telangana, which allows the company to provide customized PEBs to meet customer requirements. The company further plans to set up manufacturing facilities in Andhra Pradesh and Gujarat. The company has built long-standing relationships with many customers, including various customer groups, due to its focus on quality, cost efficiency, and timely execution.
Objective of the Interarch Building Products Ltd IPO
The net proceeds from the fresh issue will be used towards the following purposes:
- Financing the capital expenditure towards setting up a new PEB manufacturing unit (classified as phase 2 ofthe company’s capacity development plan at the planned Andhra Pradesh manufacturing facility);
- Financing the capital expenditure towards upgradation of the Kichha manufacturing facility, Tamil Nadu manufacturing facility I, Tamil Nadu manufacturing facility II and Pantnagar manufacturing facility;
- Funding investment in information technology assets for upgradation of existing information technology infrastructure of the company;
- Funding incremental working capital requirements; and
- General corporate purposes.
Rationale To Invest In Interarch Building Products Ltd IPO
Integrated manufacturing with in-house design and project management enhances efficiency and quality
The company’s vertically integrated manufacturing operations cover the entire PEB product lifecycle, from estimation, design, and engineering to fabrication, supply, and on-site project management for installation and erection at customer sites. The company’s manufacturing facilities are equipped with tooling, testing, and quality control equipment, adhering to international quality management standards. By continuously investing in these facilities and design capabilities, the company aims to develop cost-efficient manufacturing processes that meet customer requirements and specifications. The company’s manufacturing operations are supported by a supply chain of third-party suppliers in India, providing raw materials like steel according to specifications. A network of transporters ensures the delivery of raw materials to manufacturing facilities and finished products to customer sites. The implementation of ERP infrastructure across significant operations and departments enhances the integration of supply chain relationships, design and engineering, internal processes, sales and marketing offices, and project management, improving cost and time efficiency. Additionally, the company has invested in computer-aided design technology, such as Staad Pro, MBS, FrameCad, Tekla, AutoCAD, and ZWCAD, to help its design and engineering team meet customer requirements for design and detailing. The company’s project planning and control team manages order execution and coordinates with various departments. They also liaise with customers on all project aspects, from estimation to handover, including design, engineering, manufacturing, quality testing, erection, and installation. All teams collaborate with the design and engineering team to ensure timely delivery of customized, design-compliant PEBs. The company leverages its vertically integrated manufacturing operations to maintain strategic control over the entire process, from design and engineering to manufacturing, installation, and erection of PEBs at customer sites. This approach helps execute orders efficiently in terms of time and cost, while minimizing reliance on external parties. and coordinates with various departments. They also liaise with customers on all project aspects, from estimation to handover, including design, engineering, manufacturing, quality testing, erection, and installation. All teams collaborate with the design and engineering team to ensure timely delivery of customized, design-compliant PEBs. The company leverages its vertically integrated manufacturing operations to maintain strategic control over the entire process, from design and engineering to manufacturing, installation, and erection of PEBs at customer sites. This
approach helps execute orders efficiently in terms of time and cost, while minimizing reliance on external parties.
Strong market position and loyal customer base enhances company’s competitive edge
With 30 years of experience in the PEB industry, Interarch has evolved into a comprehensive PEB solution provider. In FY24, it ranked third among integrated PEB players in India based on operational revenue. To maintain a strong market presence, the company operates eight sales and marketing offices across Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, and West Bengal, ensuring effective customer service. The company also boasts a strong and diverse customer base within the sectors it operates, i.e. industrial/manufacturing, infrastructure and building. The company’s industrial and manufacturing construction clients include Grasim Industries, Berger Paints, an air conditioner manufacturer, Timken India Limited, and Addverb Technologies. In the infrastructure construction category, the company serves a warehousing and logistics service provider. The company has built long-standing relationships with many customers due to its focus on quality, cost efficiency, and timely execution. It achieved an impressive repeat order rate of 81.4% in FY24, up from 58.6% in FY22, indicating enhanced customer satisfaction and loyalty. The company has a diverse customer base and a well-managed, de-risked client portfolio, with the top five customers contributing no more than 26% of total revenue. With a robust market position, a diverse and loyal customer base, and a proven track record of quality and efficiency, Interarch is well-positioned to continue its growth trajectory and maintain its leadership in the PEB industry.
Valuation of Interarch Building Products Ltd IPO
Interarch Building Products Ltd. designs, manufactures, and sells PEBs through two main offerings. Firstly, the company provides PEB Contracts, delivering complete PEBs on a turnkey basis, which includes on-site project management for installation and erection. Secondly, Interarch offers PEB Sales, encompassing metal ceilings, corrugated roofing, PEB
steel structures, and light gauge framing systems. In PEB construction, various primary and secondary building components are manufactured at the company’s plant and transported in a completely knocked-down form for assembly and erection at the customer’s site. Interarch’s extensive experience and vertically integrated manufacturing operations ensure
efficient, cost-effective, and high-quality delivery of PEBs. With a robust market position, diverse and loyal customer base, and a proven track record of quality and efficiency, Interarch is well-positioned to continue its growth trajectory and maintain its leadership in the PEB industry. The company’s strategic control over the entire PEB lifecycle, from design to installation, minimizes reliance on external parties, further enhancing its competitive edge. With the government’s continued focus on infrastructure, as evidenced by increasing central and state budget allocations to capital expenditure, and further growth driven by urbanization, industrial capital expenditure, planned capacity expansions, and government-led initiatives, Interarch is well-positioned to capitalize on the growth of the PEB industry in India. The company’s extensive track record, domain expertise, established brand presence, and strong market position, combined with its integrated facilities for design and engineering, manufacturing, and on-site project management for the installation and erection of PEBs, provide a solid foundation for leveraging these growth opportunities. Financially, the company achieved impressive growth between FY22 and FY24, with Revenue, EBITDA, and PAT growing at a CAGR of 24.6%, 80.2%, and 124.4%, respectively. The company’s revenue breakdown for FY24 shows that 75.7% came from PEB contracts, while 23% was generated from PEB sales. Interarch’s strong market position, integrated operations, and diverse customer base ensure costeffective and timely project execution, thereby positioning the company for success in the PEB industry. On the upper price band, the issue is valued at a P/E of 15.3x based on FY24 earnings which we feel is fairly valued compared to its peers. We, thus, recommend a SUBSCRIBE rating to the issue from a medium to long term perspective.
What is the Interarch Building Products Ltd IPO?
Interarch Building Products IPO is a book built issue of Rs 600.29 crores. The issue is a combination of fresh issue of 0.22 crore shares aggregating to Rs 200.00 crores and offer for sale of 0.44 crore shares aggregating to Rs 400.29 crores.
How to apply for the Interarch Building Products Ltd. IPO through Stoxbox?
To apply for the Saraswati Saree Depot Ltd. IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Interarch Building Products Ltd IPO open?
Interarch Building Products Ltd IPO is opening on 19th August 2024.
What is the lot size of the Interarch Building Products Ltd IPO?
The Lot Size of Interarch Building Products Ltd IPO is 16 equity shares
When is the Interarch Building Products Ltd IPO allotment date?
The allotment Date for Interarch Building Products Ltd IPO is 22th August 2024
When is the Interarch Building Products Ltd IPO listing date?
The listing Date for Interarch Building Products Ltd IPO is 26th August 2024
What is the minimum investment required for the Interarch Building Products Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,400
What is the maximum investment allowed for the Interarch Building Products Ltd. IPO?
In the Retail segment the maximum investment requirement is Rs. 187,200
What are the risks associated with investing in the Interarch Building Products Ltd IPO?
- The company relies on a limited number of third-party suppliers for a continuous supply of raw materials and does not have ongoing or exclusive agreements with any of them. The loss of these suppliers or delays in raw material deliveries could adversely affect the company’s business, operational results, financial condition, and cash flows.
- The business and profitability are substantially dependent on the availability and the cost of raw materials and components consumed, including steel, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact the business, results of operations, financial condition and cash flows.
- Customers or customer groups do not commit to long-term or continuing contracts and may cancel or modify their orders or postpone or default in their payments. Any cancellation, modification, payment postponement or payment default in regard to the order book could materially harm the company’s cash flow position, revenues and earnings.
When will the Interarch Building Products Ltd IPO shares be credited to my Demat account?
The Interarch Building Products Ltd IPO be credited to the account on allotment date which is 23th August 2024
Where can I find the Interarch Building Products Ltd IPO prospectus?
The prospectus of Interarch Building Products Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to the Interarch Building Products Ltd IPO?
| IPO Open Date | Monday, August 19, 2024 |
|---|---|
| IPO Close Date | Wednesday, August 21, 2024 |
| Basis of Allotment | Thursday, August 22, 2024 |
| Initiation of Refunds | Friday, August 23, 2024 |
| Credit of Shares to Demat | Friday, August 23, 2024 |
| Listing Date | Monday, August 26, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on August 21, 2024 |
