Arisinfra Solutions IPO: Check IPO Date, Lot Size, Price & Details

Introduction:

The company operates as a business-to-business (B2B) technology-driven firm within the growing construction materials market, focusing on simplifying and digitizing the entire procurement process. It aims to provide an efficient end-to-end procurement experience by leveraging its extensive network of vendors to source construction materials for real estate and infrastructure developers and contractors, positioning itself as a one-stop solution for all their material needs.

Since its inception, the company has experienced significant growth. Its network of registered customers and vendors has expanded from 431 customers and 441 vendors as of March 31, 2022, to 2,133 customers and 1,458 vendors by March 31, 2024. Additionally, for the fiscal years 2024, 2023, and 2022, the number of active customers—defined as customers who have purchased construction materials at least once during the respective fiscal years—was 1,278, 1,117, and 431, respectively. The company’s customer base includes prominent real estate and infrastructure developers and contractors, such as Capacit’e Infraprojects Limited, J Kumar Infraprojects Limited, Afcons Infrastructure Limited, EMS Limited, S P Singla Constructions Private Limited, Real Gem Buildtech Private Limited, Wadhwa Group Holdings Private Limited, Casa Grande Civil Engineering Private Limited, Sheth Creators Private Limited, Puranik Builders Limited, and Transcon Iconica Private Limited.

Through its Subsidiary, ArisUnitern Re Solutions Private Limited (“ArisUnitern”), it offers a diverse range of value added services, including advisory and consultancy services, along with marketing and sales support, specifically tailored to meet the needs of real estate developers with respect to their projects. Such services enable it  to increase its revenues, foster long-term relationships with developers and help position itselfas trusted advisors and partners to their businesses.

IPO Details:

Objectives of Issue:

• Repayment/prepayment, in full or part, of certain outstanding borrowings availed by the Company;
• Funding the working capital requirements of the Company;
• Investment in the Subsidiary, Buildme Infra Private Limited (“Buildmex”), for funding its working capital requirements;
• General corporate purposes and unidentified inorganic acquisitions.

Key Strengths:

• Capitalization on the Fragmented Industry – The Indian construction materials market presents a significant opportunity due to its highly unorganized and fragmented nature, with few large, organized players. This creates challenges for both vendors and customers. On the demand side, customers face issues such as inconsistent material availability, quality concerns, lack of transparency, limited pricing options, and access to only a few vendors. These problems lead to reduced control and visibility in the procurement supply chain. On the supply side, vendors struggle to expand their reach and scale operations profitably. The involvement of multiple intermediaries complicates the process, causing delays and reducing profit margins for vendors.The company addresses these challenges by streamlining the procurement of construction materials. Using technology, it gathers bids from vetted vendors, analyzes pricing and terms, and provides customers with a single, comprehensive quote.
• Expanding Sales From Third Party Manufactures - The company forms strategic partnerships with third-party manufacturers to utilize their underutilized capacities, thereby enhancing its supply chain and expanding its portfolio of third-party manufactured construction materials. It believes these partnerships provide greater control over production and quality, streamline the supply chain, boost revenue, improve margins, and extend its market reach. The company prioritizes partnerships with established players to minimize financial and operational risks, leveraging their strengths and capabilities without incurring significant capital expenditure. These partnerships enable the company to focus on its core business while benefiting from its partners' expertise, offering greater flexibility to scale operations and adapt to changing market trends.
• Leveraging Strong Network - One of the company’s key value propositions for both customers and vendors is providing access to a broad network of partners on both sides of the transaction. As the company attracts more customers, the demand for construction materials rises, encouraging more vendors to join its ecosystem. This growing vendor pool increases the variety, availability, and options of construction materials, which in turn attracts more customers. This ongoing cycle of increasing customers and vendors strengthens the company’s competitive position and drives continuous growth. Additionally, the higher participation of customers and vendors leads to more transactions, allowing the company to collect valuable data on market trends, customer preferences, and vendor performance. By leveraging this data, the company can make more informed decisions, refine its strategies, and continuously improve the user experience.

Risks:

• Dependency on Real Estate and Infra Sector- The company derive a significant portion of its revenues from the sale of aggregates, RMC and steel to the developers and contractors engaged in the development of real estate and infrastructure projects.The sale of these construction materials may decline as a result of, amongst other factors, lower demand for these construction materials from its customers, a downturn in the real estate and infrastructure sectors, increase in competition, and macro-economic conditions in India. A decline in demand for aggregates, RMC and steel would have an adverse impact on its business, results of operations, financial conditions and cash flows.
• Loss of Receivable Further Increases Pressure on Working Capital- The nature of its business requires significant working capital as in its line of business, the time taken to receive payments from customers is typically longer than the time in which it have to pay its vendors. It extends credit to customers in the ordinary course of its business and receive payments from them in parts as per the terms of the purchase orders entered into with its   Consequently, its  business depends on its  ability to successfully obtain payments due from such customers. The loss in Fiscal 2023 was primarily due to expenses related to the loss allowance on trade receivables of ₹ 145.25 million in Fiscal 2023 and the loss in Fiscal 2022 was primarily due to expenses related to the loss allowance on trade receivables of ₹ 60.58 million and fair value loss on derivatives of ₹ 82.71 million. Any Further loss of trade receivable would further aggrevate the loss of company plus will increase pressure on company for its working capital.
• Limited Control due to Third Party Manufacturer - The company have historically derived a significant portion of its revenues from the sale of construction materials which it sources from its vendors. However, in Fiscal 2023, it started engaging third-party manufacturers to manufacture certain construction materials for the company, including aggregates, RMC and autoclaved aerated concrete (“AAC”) blocks, which it sells to its  Such third-parties may choose not to manufacture materials for the company  on commercially acceptable terms, or at all. In the event the company is unable to find a suitable replacement, it may not be able to supply construction materials to customers, which could adversely affect its business and results of operations.
• Over Dependency on Few States- The company derive a substantial portion of its  revenues from the states of Maharashtra, Karnataka and Tamil Nadu, which accounted for 94.79%, 81.05%, 85.04% and 92.15% of its  revenue from operations for the nine months ended December 31, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. Consequently, any unfavourable developments in these states could adversely affect its  business, results of operations, financial condition and cash flows.

Financial Snapshot:

KPI comparison with Industry Peers

The Company operates a B2B technology driven platform to streamline construction material procurement for real estate and infrastructure developers, a model distinct from traditional supply chain or manufacturing businesses in the sector. Its integrated approach, combining a vendor network and material delivery across a wide geographical reach, differentiates it  in tech-enabled procurement with no direct listed comparable in India or globally.