Interarch Building Products IPO: sets price band of Rs 850-900

Interarch Building Products IPO Information

Interarch Building Products IPO sets price band of Rs.850 to Rs.900 for each Share for its upcoming IPO which is a book-built issue of Rs.600.29 crore. Interarch Building Products Ltd. IPO is a Mainboard IPO by Interarch Building Products Ltd. that was founded in 1983. The company offers comprehensive pre-engineered steel construction solutions in India. It also provides complete facilities for pre-engineered steel building (PEB) installation and construction, including design, engineering, manufacture, and on-site project management.

The company had 141,000 met-tons installed capacity annually as of March 31, 2023, being the second-highest installed capacity. With a 6.1% market share in operating income in FY2023, it is among the integrated PEB companies in India.

Through PEB Contracts and PEB Material Sales, the company offers PEBs which include PEB steel structures, light gauge frame systems, metal ceilings, and corrugated roofs. Blue Star Climatech, Berger Paints India Ltd., Grasim Industries Ltd., Addverb Technologies Ltd., and Timken India Ltd. are the customers the company serves.

The company owns 4 manufacturing facilities, 2 are located in Sriperumbudur, Tamil Nadu while the other 2 are situated in Pantnagar and Kichha, Uttarakhand. The company has ISO 9001:2015 accreditation for its quality management systems at each of its manufacturing plants.

The company plans to launch its IPO on 19 August 2024.

Interarch Building Products IPO Details

The IPO of Rs.600.29 crore comprises a fresh issue of 0.22 crore Shares worth Rs.200 crore and an offer for sale (OFS) of 0.44 crore Shares amounting to Rs.400.29 crore out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors.

• Interarch Building IPO Date- August 19 to August 21, 2024.

• Interarch Building IPO Listing Date- Monday, August 26, 2024.

• Interarch Building Products IPO Price Band- Rs.850 to Rs.900 for each Share

 

If You want to apply for the IPO, Click Here to Open a Demat Account.

 

 

Company Financial

The company’s revenue rose by 15%, while profit after tax (PAT) increased by 6% during the FYs ending March 31, 2024, and March 31, 2023. 

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2024.

• The company’s total revenue is over Rs.1,306.32 crore.

• The net worth of the company is Rs.262.65 crore.

• The company's EBITDA is Rs.32.88 crore.

• The total assets of the company are Rs.755.01 crore.
  
  

(Amount in crore)

Period	31 Mar 2024	31 Mar 2023	31 Mar 2022
Total Assets	755.01	675.03	543.75
Total Revenue	1,306.32	1,136.39	840.86
PAT	86.26	81.46	17.13
Net worth	262.65	343.8	262.65
Borrowings	3.36	11.38	3.36

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in million)

Net Cash Flow in Various Activities	31 Mar 2024	31 Mar 2023	31 Mar 2022
Net Cash Flow Operating Activities	815.23	312.86	261.80
Net Cash Flow Investing Activities	-327.60	-189.88	90.81
Net Cash Flow Financing Activities	-458.49	62.60	-1.42

 

Revenue Bifurcation For Sale of Products For The Last Three Fiscals

(Values in millions)

Segment	FY 2024	FY 2023	FY 2022
Revenue from Pre-engineered building (contracts)	9,785.87	9,861.37	7,213.41
Building Materials	2,974.96	1,204.34	937.57
Total	12,760.83	11,065.71	8,150.98

 

 Detailed Video

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Financing the capital costs associated with constructing a new PEB manufacturing facility (referred to as the "Project"), which is categorized as Phase 2 of the Planned Andhra Pradesh Manufacturing Facility's capacity development plan.

• Arranging funding for the capital expenditures necessary for the renovation of the Pantnagar, Kichha, Tamil Nadu I, and Tamil Nadu II manufacturing facilities.

• Financing the purchase of IT assets to update the business's current IT infrastructure.

• Financing the increase in working capital needs.

• General Corporate Purposes.
  
  

Peers of Interarch Building Products Ltd.

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E (x)
Everest Industries Ltd.	10	11.42	105.95
Pennar Industries Ltd.	5	7.29	25.16

 

Evaluation

The Interarch Building Products IPO price is Rs.850 to Rs.900 for each Share.

Evaluation of P/E Ratio

Considering the FY ended on 31 March 2024, with an EPS of Rs.58.68 from the last year, the resulting P/E ratio is 15.33x.

Considering the weighted EPS of Rs.49.35 for the last three years, the P/E ratio is 18.23x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 65.56x.

Particulars	P/E Ratio (x)
Highest	105.95
Lowest	25.16
Average	65.56

In simple words, the P/E ratio of Interarch Building Products IPO (15.33x), compared with the industry’s average P/E of 65.56x, has an undervaluation. Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths 

• Market Position and well-established brand in India's expanding pre-engineered steel building sector.

• Highly integrated production processes supported by internal design and engineering, on-site project management, and marketing and sales resources.

• A track record of success supported by the ability to manage projects on location.

• A varied client base and enduring connections with important clients.

• Huge order book's status and financial performance.

• Knowledgeable and skilled managers and promoters.

 

IPO’s Weaknesses 

• Its business and profitability are largely reliant on the cost and availability of the raw materials and components it uses, such as steel. Any fluctuations in raw material prices or disruptions to the timely and sufficient supply of raw materials could harm its operations.

• A number of its clients' orders have been canceled in the past, and any cancellations in the future could affect its cash flows, financial conditions, and operational revenue.

• The cyclical nature of the sector and seasonal variations could affect its financial results.

• A large amount of the company’s income comes from its PEB Contracts, which also require onsite project management for the installation and erection of pre-engineered steel buildings. Failure to manage projects well could result in mishaps or disruptions, which could cause project delays and negatively impact the company.

• Tamil Nadu and Uttarakhand are currently home to the majority of its manufacturing facilities. Any notable changes in the social, political, economic, or seasonal domains, as well as any natural disasters or civil unrest in Tamil Nadu and Uttarakhand, might potentially negatively impact its commercial operations, financial standing, and cash flows.
  
  

 

Interarch Building Products IPO GMP Today

The Interarch Building Products IPO GMP today is Rs.355.

IPO timetable (Tentative)

The IPO is scheduled from August 19 to August 21, 2024, with allotment on August 22, 2024,  refund initiation on August 23, 2024, and listing on August 26, 2024.

Events	Date
IPO Opening Date	August 19, 2024
IPO Closing Date	August 21, 2024
IPO Allotment Date	August 22, 2024
Refund Initiation	August 23, 2024
IPO Listing Date	August 26, 2024

 

Interarch Building Products IPO Details (Others)

The IPO with a face value of Rs.10 per Share offers a total issue size of 6,669,852 Shares at Rs.850 to Rs.900 per Share with a Lot size of 16 Shares and will be listed at BSE and NSE.

IPO Opening & Closing Date	August 19, 2024 to August 21, 2024
Face Value	Rs.10 per Share
Issue Price	Rs.850 to Rs.900
Lot Size	16 Shares
Issue Size	6,669,852 Shares (aggregating up to Rs.600.29 crores).
Offer for Sale	4,447,630 Shares (aggregating up to Rs.400.29 crores).
Fresh Issue	2,222,222 Shares (aggregating up to Rs.200.00 crores)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Interarch Building Products IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (16 Shares) amounting to Rs.14,400, and 13 Lots (208 Shares) amounting to Rs.187,200 respectively, while for HNI investors, the minimum Lot is 14 (224 Shares) amounting to Rs.201,600.

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	13 Lots
S-HNI (Min)	14 Lots
S-HNI (Max)	69 Lots
B-HNI (Min)	70 Lots

Interarch Building Products IPO Reservation

Institutional Share Portion	50%
Retail Investors Share Portion	35%
Non-Institutional Shares Portion	15%

 

Promoters and Management of Interarch Building Products Ltd. 

• Arvind Nanda

• Gautam Suri

• Ishaan Suri 

• Viraj Nanda
  
  

Interarch Building Products IPO Lead Managers

• Ambit Private Limited

• Axis Capital Limited
  
  

Dividend Policy

The company has not paid any dividend in the last 3 Fiscals.

Conclusion

The company has experienced negative cash flow in investing activities and financing activities in the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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