Interarch Building Products is gearing up to launch its IPO on August 19, aiming to raise Rs 600 crore.
Investors are keenly watching to see which major institutional investors will participate in the anchor book.
According to sources, big names like ICICI Prudential Mutual Fund, Mirae Asset Mutual Fund, Bajaj Allianz Life Insurance, and Whiteoak Mutual Fund are expected to invest.
Notably, 60% of the IPO is reserved for qualified institutional buyers (QIBs), with half of that portion allocated to anchor investors.
IPO Details and Share Allotment
The Interarch Building Products IPO will be open for subscription from August 19 to August 21, with a price band set between Rs 850-900 per share.
The lot size for investors is 16 shares. Employees of the company will benefit from a Rs 85 discount per share.
The IPO is structured with 50% reserved for QIBs, 15% for non-institutional investors (NIIs), and 35% for retail investors.
The share allotment is scheduled to be finalized on August 22, and the shares will be listed on both BSE and NSE on August 26.
Offer for Sale and Use of Funds
Under the IPO, new shares worth Rs 200 crore will be issued.
Additionally, 44,47,630 shares with a face value of Rs 10 each will be sold through the Offer for Sale (OFS) window.
Key stakeholders including Arvind Nanda, Gautam Suri, Ishan Suri, Shobhana Suri, and OIH Mauritius will be selling their shares.
OIH Mauritius plans to sell its entire 12.47% stake in the company.
The funds raised through the OFS will go to the shareholders selling their stakes.
The proceeds from the new shares will be allocated for several purposes: Rs 58.53 crore for setting up a new PEB manufacturing unit, Rs 19.25 crore for upgrading the existing manufacturing facility, Rs 10.97 crore for IT infrastructure enhancements, and Rs 55 crore for working capital needs
The remaining funds will be used for general corporate purposes.
Company Overview and Financial Performance
Founded in 1983, Interarch Building Products specializes in manufacturing, design, engineering, and on-site project management for pre-engineered steel buildings (PEBs).
The company has completed 677 PEB contracts between FY 2015 and FY 2024.
As of FY 2023, Interarch ranked as the third-largest integrated PEB company in India by operating revenue, holding a 6.5% market share.
The company operates four manufacturing facilities in Uttarakhand and Tamil Nadu, with an annual capacity of 1.41 lakh tonnes.
Major clients include Berger Paints and Grasim Industries.
Interarch’s financial health has been steadily improving.
The company’s net profit surged from Rs 17.13 crore in FY 2022 to Rs 81.46 crore in FY 2023, and further to Rs 86.26 crore in FY 2024.
During this period, the company’s revenue grew at a compound annual growth rate (CAGR) of over 24%, reaching Rs 1,306.32 crore.
Risks Associated with the Interarch IPO
Investors should be aware of several risks associated with investing in Interarch Building Products’ IPO.
The company’s listed peers include Everest Industries and Pennar Industries. In FY24, Interarch’s return on equity (RoE) was 20.4%, compared to 12% for Everest Industries and 3% for Pennar Industries.
However, Interarch’s business is heavily dependent on the cost and availability of raw materials, particularly steel.
Any disruptions in supply or significant price fluctuations could negatively impact the company’s financial performance and cash flow.
Additionally, underutilization of production capacity could also hurt the business. A significant portion of Interarch’s revenue comes from repeat orders—81.3% in FY 2024.
If these repeat customers decide to switch to other providers, it could pose a substantial risk to the company’s revenue stream.
