Interarch Building Products Limited IPO: Check IPO Date, Lot Size, Price & Details

Introduction:

Interarch Building Products was incorporated in 1983. The company is one of the leading turnkey pre-engineered steel construction solution providers in India with integrated facilities for design and engineering, manufacturing, and on-site project management capabilities for the installation and erection of pre-engineered steel buildings (“PEB”).The company offers its PEB services by way of (a) pre-engineered steel building contracts (“PEB Contracts”), wherein we provide complete PEBs on a turn-key basis to our customers, and as a part of which, we also provide on-site project management expertise for the installation and erection of PEBs supplied by us at our customers’ sites and (b) sale of pre-engineered steel building materials (“PEB Sales”).

The company further had the second largest aggregate installed capacity of 141,000 metric tonnes per annum (“MTPA”) as of March 31, 2024, and a market share of 6.5% in terms of operating income in Financial Year 2024 among integrated PEB players in India Currently, the company is an established Engineering, procurement, and Construction

IPO Details:

Objectives of Issue:

• Financing the capital expenditure towards setting up a new PEB manufacturing unit
• Financing the capital expenditure towards the upgradation of the Kichha Manufacturing Facility, 
• Funding investment in information technology (“IT”) assets for upgrading the company's existing information technology infrastructure;
• General Corporate Purposes
• Funding incremental working capital requirements

Key Strengths:

• End-to-end Solutions due to Integrated Manufacturing Operations- The company's manufacturing operations are vertically integrated to a significant extent, enabling our presence across the product lifecycle of PEBs, from estimation, designing, engineering, and fabrication of PEBs in completely knockdown condition at our Manufacturing Facilities, to supply and on-site project management of the installation and erection of PEBs at the site of the customer. Since the manufacturing capabilities span the spectrum of PEBs from metal ceilings and corrugated roofing to PEB steel structures (each of which are interdependent), we are able to emphasize design compatibility, which enhances the overall structural integrity and stability of the entire PEB, contributing to our ability to execute our PEB Contracts
• Diverse and Long Standing Relationship with Customers– The company revenue from repeat customers account for more than 50% revenue in the last 3 years.Three of the top five customers of company have been associated with the company for over 5 Long-standing relationship displays company’s capability in terms of quality consciousness, cost efficiency, and timely execution. 

Risks:

• Concentrated Manufacturing Facility- The Company manufacturing facility are situated in Tamil Nadu and Uttarakhand. Any disruption in this area due to unforeseen events and circumstances may affect the manufacturing capability of the company which in turn could affect the probability of the company.

• Fragmented Industry -The company operates in the industry where unorganized market segments holds more than 50% of the PEB market in India. The unorganized market players don’t witnessed much barrier of entry due to non capital intensive nature of business. Any increase in the market share of unorganized players could affect its business.
• Outsourcing of erection to Third Party – The company relies on third parties for the erection and installation of PEB structures at client sites. Inefficiencies or delays from these third-party contractors could lead to issues with meeting client obligations and potentially disrupt the company’s operations.

 Financial Snapshot:

Debt to Equity Ratio - The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. It is a measure of the degree to which a company is financing its operations with debt rather than its own resources.

KPI comparison with Industry Peers

Conclusion

The company has outperformed its listed peers in several key financial metrics, including revenue growth, three-year average profit margins, three-year average returns on capital, and three-year fixed asset turnover ratio. Additionally, it maintains a favorable net debt-to-equity ratio. Despite these strong performance indicators, the company is currently valued at a relatively lower price-to-earnings ratio. The Pre-Engineered Building (PEB) industry is projected to experience a compound annual growth rate (CAGR) of 11-12% over the next five years, driven by its cost efficiency, reduced construction time, and renewable benefits compared to traditional methods. Given the company's robust fundamentals and positive industry outlook, it is recommended for long-term investment.Saraswati Saree IPO: Check IPO Date, Lot Size, Price & Details