Interarch Building Products IPO- Investment Rationale, Financials, Peer Comparison, Risks & More: Anand Rathi

Anand Rathi Report

Interarch Building Products Ltd. launched its initial public offering today and the issue will close for subscription on Aug. 21. The provider of turnkey pre engineered steel construction solutions in India plans to raise Rs 600.3 crore from the ipo and for the same has fixed price band of Rs 850 to Rs 900 per share.

The IPO consists of a fresh issue of shares worth Rs 200 crore and an offer-for-sale component of Rs 400.3 crore. The minimum lot size for bidding will be 16 shares.

Objects of the fresh issue

• Financing the capex towards setting up a new PEB manufacturing unit.

• Financing the capex towards upgradation of TN manufacturing unit.

• Funding investment in IT assets for upgradation of existing IT infra.

• Funding incremental working capital requirements.

• General Corporate purpose.

Valuation & Outlook

Interarch Building Products is ranked third in operating revenue from the PEB business in the Financial Year 2024 among integrated PEB players in India.

Additionally, as of March 31, 2024, their company held the second-largest aggregate installed capacity at 141,000 mtpa, with a 6.5% market share in terms of operating income in Financial Year 2024 among integrated PEB players in India.

Their manufacturing operations are highly vertically integrated, allowing them to participate across the entire product lifecycle of PEBs. This includes estimation, design, engineering, and fabrication of PEBs in completely knock-down condition at their manufacturing facilities, as well as the supply and on-site project management for the installation and erection of PEBs at customer sites.

The company's P/E ratio is 17.4 times based on its FY24 earnings, with a market capitalization of Rs 14,974.3 million after the issuance of equity shares and a market cap-to-sales ratio of 1.15 times its FY24 earnings.

We believe that the issue is fairly priced, therefore we recommend “Subscribe – Long Term” rating to the IPO.

Click on the attachment to read the full IPO report:

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