ArisInfra Solutions IPO — Price Band, Listing Date, Financials, Peer Comparison, Risks And More: DRChoksey

ArisInfra Solutions' Rs 499.6 crore IPO will be launched on June 18 for subscription and the company has fixed the price band in the range of Rs 210 to Rs 222 Apiece. .NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..DRChoksey Report.ArisInfra Solutions Ltd. will open its initial public offering on June 18 and the offer closes for subscription on June 20. A technology-enabled B2B construction material procurement platform company has fixed the price band in the range of Rs 210 to Rs 222 Apiece. The Rs 499.6 crore comprises entirely of fresh issue with no offer-for-sale component..The allotment for ArisInfra Solutions IPO is expected to be finalized on June 24.The shares will be listed on both the National Stock Exchange and the BSE on June 25.IIFL Securities Capital Services Ltd., JM Financial Ltd., and Nuvama Wealth Management Ltd. are the book-running lead managers for the public issue..Objects of the OfferRepayment or prepayment of certain outstanding borrowings. Funding the working capital requirements of the Company.Investment in its Subsidiary, Buildmex-Infra Pvt. Ltd., for funding its working capital requirements.General corporate purposes and unidentified inorganic acquisitions..Outlook and ValuationArisInfra, is one of the few digital first building material supplier, which operates a well integrated operations by deploying an asset-light model. Despite having integrated operations and serving only B2B customers, its operating margins appear very thin. During FY22-25, the Company has ventured into selling third-party manufactured products along with vendor sourced building materials to improve and scaleup its gross margins from 9.9% in FY22 to 14.2% during 9M FY25. It relies on short-term borrowings to fund its working capital requirements, which has a severe impact on the profitability, led by high interest burden. During 9MFY25, even though the Ebitda grew ~2x of the FY24 levels, it was only sufficient to offset the depreciation and service its interest expenses. The company plans to raise ~Rs 5 billion through fresh equity issue in the initial offering, which will be partly utilized to pare of the current short-term borrowings and fund its future working capital requirements. Although, paring off the debt will significantly improve its profitability, we believe it still won’t have a material impact on the operational metrics. The company needs to improve its gross margins led by higher mix of third-party products and improve its operational efficiency further to create a material impact on operational performance, which appears bleak as it operates in B2B segment only. Globally, there are limited listed peers, which operate on a similar business model. Most of its listed peers domestically and globally operate in B2C format in large format stores to cater the retail consumers, which supports their higher margin profile. On comparing financial performance of the Company, with similar players catering to different consumer segment, ArisInfra’s initial offering at 48.3x annualized FY25 EV/Ebitda appears very expensive to us. Accordingly, we recommend a “Avoid” rating to the issue..Click on the attachment to read the full report:.Arisinfra Solutions IPO GMP Indicates Over 11% Listing Gain Ahead Of June 18 Launch — Check Key Details.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ArisInfra Solutions IPO — Price Band, Listing Date, Financials, Peer Comparison, Risks And More: DRChoksey

ArisInfra Solutions' Rs 499.6 crore IPO will be launched on June 18 for subscription and the company has fixed the price band in the range of Rs 210 to Rs 222 Apiece.

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