Arisinfra Solutions IPO Good or Bad - Detailed Review

Arisinfra Solutions is set to launch its initial public offering (IPO), opening from March 20, 2025, to March 25, 2025. As investors consider this opportunity, many are asking: Is it worth investing in Arisinfra Solutions IPO? To answer this question, we’ve prepared a comprehensive Arisinfra IPO review, analyzing the company’s business model, financial health, and growth prospects to help you make an informed decision.

Arisinfra Solutions IPO Review

Arisinfra Solutions, founded in 2021, is transforming India's construction materials procurement landscape by leveraging technology and a vast network of vendors. The company specializes in supplying bulk materials, including aggregates, ready-mix concrete (RMC), steel, cement, and construction chemicals. Specifically, aggregates account for 31.19%, RMC for 21.12%, and steel for 16.13% of the company's operating revenue. With an expanding customer base that includes prominent clients such as Capacit’e Infraprojects and J Kumar Infraprojects, Arisinfra Solutions is establishing a strong reputation in the market.

The company has built a strong regional presence in Maharashtra, Karnataka, and Tamil Nadu, which together account for over 80% of its sales. However, this concentration makes it susceptible to regional disruptions. 

To diversify its offerings, Arisinfra acquired a significant stake in Bengaluru-based Unitern Advisors in 2022. Rebranded as ArisUnitern, this subsidiary provides strategic management and advisory services, including project development, cash flow management, and sales and marketing support, thereby strengthening customer relationships and broadening revenue streams. 

Arisinfra has shown promising growth in revenue over the years, but its profitability remains a concern, with consistent net losses and a high debt-to-equity ratio. The company has, however, improved its EBITDA margins, showcasing operational progress. 

Investors looking for exposure to a fast-growing, tech-driven B2B model in the construction sector may find Arisinfra Solutions an interesting opportunity. However, given its ongoing losses, high debt, and revenue concentration risks, investors should carefully assess its path to profitability and long-term sustainability before making an investment decision.

Company Overview of Arisinfra Solutions IPO

Incorporated on February 10, 2021, Arisinfra Solutions has emerged as a technology-driven B2B enterprise transforming the procurement landscape for construction materials in India. Operating within a traditionally fragmented and unorganized sector, the company leverages technology and an extensive vendor network to streamline the supply of bulk materials such as aggregates, ready-mix concrete (RMC), steel, cement, and construction chemicals. By digitizing procurement processes, it aims to enhance efficiency, transparency, and cost-effectiveness for real estate and infrastructure developers.

Between April 2021 and March 2024, Arisinfra Solutions facilitated the delivery of 10.35 million metric tonnes (MT) of materials to 2,133 customers across 963 pin codes, covering key urban markets such as Mumbai, Bengaluru, and Chennai. By eliminating intermediaries and integrating digital workflows, the company enables clients to obtain competitive quotations within minutes while ensuring seamless delivery through its comprehensive management system. 

The company's customer base expanded significantly, growing from 431 in FY22 to 2,133 in FY24, while its vendor network increased from 441 to 1,458 during the same period. Prominent clients include Capacit’e Infraprojects, J Kumar Infraprojects, and Wadhwa Group, with key vendors such as Guardian Casting and G S Ispat. 

Beyond procurement, the company has diversified its offerings through its subsidiary, ArisUnitern, which provides advisory and consultancy services to real estate developers. This expansion not only strengthens client relationships but also creates additional revenue streams, reinforcing Arisinfra Solutions' position as a comprehensive solutions provider in the construction materials industry.

Industry Overview of Arisinfra Solutions IPO

The Indian construction materials market remains highly unorganized and fragmented, creating challenges for both vendors and customers.

In 2023, the infrastructure construction B2B market in India was valued at approximately USD 100 billion to USD 110 billion. It is expected to grow at a CAGR of 10% to 12%, reaching USD 170 billion to USD 195 billion by 2028.

Meanwhile, the B2B real estate construction market was estimated at USD 165 billion to USD 175 billion in 2023. This segment is projected to grow at a CAGR of 6% to 8%, reaching USD 230 billion to USD 250 billion by 2028.

Arisinfra Solutions, with its focus on streamlining construction material procurement through its digital platform and vendor network, is poised to benefit from this growth. As the GoI accelerates infrastructure spending and real estate demand rises, Arisinfra’s role in providing bulk materials like aggregates, cement, RMC, and steel will be crucial in supporting large-scale projects across the country.

Financial Overview of Arisinfra Solutions IPO

In FY2024, Arisinfra Solutions reported a revenue of Rs. 696.84 crore, which is lower than Rs. 746.07 crore in FY2023 but higher than Rs. 452.35 crore in FY2022. Despite the dip in revenue, the company's Adjusted EBITDA improved significantly to Rs. 38.73 crore, recovering from a loss of Rs. 0.47 crore in FY2023. This improvement indicates better cost control and operational efficiency. 

However, PAT (Profit After Tax) remained in losses, with a negative Rs. 17.33 crore in FY2024, compared to a negative Rs. 15.48 crore in FY2023 and a negative Rs. 6.48 crore in FY2022, highlighting ongoing financial pressure and high expenses.

On the financial stability front, net working capital days increased to 120 in FY2024, up from 102 days in FY2023, meaning the company is taking longer to turn its capital into revenue. The net debt-to-equity ratio improved to 1.45 in FY2024, down from 1.75 in FY2023, but still higher than 0.94 in FY2022, reflecting continued dependence on borrowed funds. While the company is making progress in improving efficiency, managing debt and sustaining profitability remain key challenges.

Strengths and Risks of Arisinfra Solutions IPO

Strengths:

• The company has leveraged AI and machine learning to streamline procurement, reduce intermediaries, and enhance efficiency, resulting in faster procurement, smooth deliveries, and seamless vendor communication.

• The company has expanded rapidly, increasing deliveries from 253 pin codes in FY2022 to 963 in FY2024, while its customer base grew from 431 to 2,133, reflecting strong market penetration.

• The company has implemented a robust credit risk framework, enabling better assessment of customer financial health, digitized documentation, and automated payment reminders, minimizing disputes and reducing collection delays.

• The company has expanded into third-party manufacturing of construction materials, improving margins, reducing reliance on external vendors, and ensuring better quality control, contributing Rs. 122.44 crore in FY2024 revenue, up from Rs. 18.40 crore in FY2023.

Risk:

• The company earns a significant portion of its revenue from aggregates, ready-mix concrete (RMC), and steel, which comprised 31.19%, 21.12%, and 16.13% of their operating revenue for Fiscal 2024. Decreased demand for any of these materials could adversely affect the company's financial condition and cash flows.

• The company’s operations are concentrated mainly in Maharashtra, Karnataka, and Tamil Nadu, contributing to more than 80% of its sales in the last three years. As a result, any adverse developments in these states could materially impact their business performance.

• The company's reliance on key customers, with its top 10 clients contributing 45.24% in FY2024, 39.07% in FY2023, and 47.19% in FY2022 of total revenue, poses a risk due to the absence of long-term contracts and potential revenue volatility.

Strategies of Arisinfra Solutions IPO

• One of their core strategies is to optimize the mix of construction materials sold by diversifying their offerings to better align with market demand and customer preference.

• The company intends to enter into additional strategic partnerships with third-party manufacturers and leverage their underutilized capacities to improve its supply chain and increase its portfolio of third-party manufactured construction materials.

• The company intends to expand into new micro-markets of existing and new geographies to reach new customers for increased market penetration.

Arisinfra Solutions Vs Peers

There are no listed companies in India or globally (outside India )that engage in a business similar to that of Arisinfra Solutions Company. Accordingly, it is not possible to provide an industry comparison in relation to Arisinfra Company.

Objectives of Arisinfra Solutions IPO

• Repayment/prepayment of all or a portion of certain outstanding borrowings availed by our Company.

• Funding the working capital requirements of the Company;

• Investment in the Subsidiary, Buildme Infra Private Limited (“Buildmex”), for funding its working capital requirements;

• Purchase of partial shareholding from existing shareholders of the Subsidiary, ArisUnitern Re Solutions Private Limited (formerly ArisUnitern Private Limited)and

• General corporate purposes and unidentified inorganic acquisitions.

Arisinfra Solutions IPO Details

IPO Date

ArisinfraSolutions IPO is open to subscription from March 20, 2025, to March 25, 2025. The shares will be allocated to investors on March 26, 2025, and the company will be listed on the NSE and BSE on March 27, 2025.

IPO Issue Price

Not yet announced

IPO Size

The Arisinfra Solutions IPO is offering a total of 2,85,71,428 shares which will completely be through a fresh issue.

IPO Allotment Status

The shares from the Arisinfra Solutions IPO will be allotted to its investors on March 26, 2025. 

Click here to check the Arisinfra Solutions IPO allotment status.

IPO Application Link

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