Interarch Building Products IPO Launching Soon: 10 Must-Know Insights Before Investing!

Interarch Building Products Ltd is preparing to launch its initial public offering (IPO) on August 19. The company, based in Noida and a leader in turnkey pre-engineered steel building solutions, has set the IPO price range between ₹850 and ₹900 per share. The IPO’s anchor book will open on August 16 and will run until August 21.

The IPO will include an offer for sale (OFS) of up to 44.48 lakh shares by the current promoters and shareholders, along with a new issuance of shares valued at ₹200 crore. Based on the top price band, the OFS is estimated to be worth around ₹400 crore. The funds from the new issuance will be used for general corporate purposes, technology upgrades, and capital expenditures.

Ambit Private Limited and Axis Capital Limited are leading the IPO as book-running managers, and Link Intime India Private Limited is the offer registrar.

Here are ten key points from the Red Herring Prospectus (RHP) to consider before investing in Interarch Building Products’ IPO:

1. Promoters: The company is promoted by Arvind Nanda, Viraj Nanda, Gautam Suri, and Ishaan Suri. Together, they own 10,913,092 equity shares, representing 75.71% of the company’s issued, subscribed, and paid-up share capital.
2. Peers: Interarch Building Products’ listed competitors include Everest Industries Ltd (with a P/E ratio of 105.95) and Pennar Industries Ltd (with a P/E ratio of 25.16).
3. Business Overview: The CRISIL Report identifies Interarch as one of India’s leading turnkey providers of pre-engineered steel building solutions. The company offers comprehensive manufacturing, design, engineering, and on-site project management services for assembling and constructing pre-engineered steel buildings (PEBs).
4. Market Position: In the financial year 2023, Interarch ranked third among integrated PEB companies in India by operating revenue from the PEB business. As of March 31, 2024, the company holds the second-largest aggregate installed capacity in India, with 141,000 metric tonnes per year (MTPA), and it captured a 6.5% market share in operating revenue for FY24.
5. Industry Growth: According to the CRISIL Report, the PEB industry in India is expected to grow at a compound annual growth rate (CAGR) of 11–12% between FY24 and FY29. Interarch is well-positioned to capitalize on this growth due to its strong track record, expertise, brand presence, and comprehensive in-house capabilities in design, engineering, manufacturing, supply, and on-site project management for PEB installations.
6. Manufacturing Facilities: Interarch operates four manufacturing facilities located in Pantnagar and Kichha, Uttarakhand, and two in Sriperumbudur, Tamil Nadu. As of March 31, 2024, these facilities have a combined installed capacity of 141,000 MTPA.
7. Clientele: Interarch’s industrial and manufacturing clients include Addverb Technologies Limited, Timken India Limited, Berger Paints India Limited, Grasim Industries Limited, and air conditioner manufacturers. In the infrastructure sector, the company serves logistics and warehousing service providers.
8. Group Companies: Interarch’s group companies are Taipan Associates Private Ltd and Aries Developers LLP.
9. Key Risks: The company’s operations and profitability depend heavily on the availability and cost of raw materials and components, especially steel. Any disruptions in the supply or price volatility of these materials could negatively impact the company’s performance. Additionally, the underutilization of current or additional manufacturing capacity could affect the company’s future prospects, financial performance, and cash flow.
10. Financial Performance: For the financial year ending March 31, 2024, Interarch Building Products Ltd reported a 6% increase in profit after tax (PAT) and a 15% increase in revenue compared to the previous year.

Regarding the lock-in period, 50% of the equity shares allocated to anchor investors are subject to a 90-day lock-in, while the remaining 50% have a 30-day lock-in period.