Interarch Building Products Limited, one of India's leading turnkey pre-engineered steel construction solution providers, is all set to launch its Initial Public Offering (IPO). The company is offering a Book Built Issue worth ₹600.28 crores. This includes a Fresh Issue of 2.22 lakh shares valued at ₹200 crores and an Offer for Sale of 4.44 lakh shares amounting to ₹400.28 crores.

The subscription for the Interarch IPO opens on August 19, 2024, and closes on August 21, 2024. The final allotment will be announced on or about August 23, 2024, and the shares are expected to be listed on BSE and NSE on or around August 26, 2024. Investors can apply through either of the platforms, and the lead managers are Axis Capital Limited and Ambit Private Limited.

IPO Price Band and Investment Details

The price band for Interarch Building Products IPO is set between ₹850 to ₹900 per equity share. The minimum lot size for retail investors is 16 shares, meaning a minimum investment of ₹14,400. For High-Net-Worth Individuals (HNIs), the minimum lot size is 14 lots (224 shares), which requires an investment of ₹201,600.

Financial Performance of Interarch Building Products Limited

Financially, Interarch has shown steady performance in recent years. The company's revenue increased from ₹8,408.57 million in FY22 to ₹13,063.15 million in FY24. Despite a decrease in EBITDA from ₹1,130.15 million in FY22 to ₹328.89 million in FY24, the company has maintained profitability with PAT rising to ₹862.62 million in FY24.

The company has also demonstrated solid earnings per share (EPS) figures, with a pre-issue EPS of ₹58.68 and a post-issue EPS of ₹51.84. At the current price band, the pre-issue P/E ratio is 15.33x, and the post-issue P/E ratio is 17.36x, which compares favorably with the industry P/E ratio of 65.56x. These figures indicate that the IPO is fairly priced, especially when considering the company’s return on capital employed (ROCE) of 25.79% and return on equity (ROE) of 19.40% for FY24.

Grey Market Premium (GMP) Insights

The Grey Market Premium (GMP) for Interarch Building Products Limited IPO is currently projected to be between ₹400 to ₹450. Although the GMP can offer insights into potential listing gains (up to 50%), it is essential to note that Grey Market trading is unofficial and not recommended for investment decisions.

Key IPO Objectives

Interarch Building Products Limited plans to utilize the proceeds from the fresh issue to finance several objectives, including:

₹585.33 million for setting up a new pre-engineered steel building (PEB) manufacturing unit as part of the company’s Phase 2 capacity development at its Andhra Pradesh facility.

₹192.46 million to upgrade existing manufacturing facilities in Tamil Nadu and Pantnagar.

₹113.92 million to invest in information technology (IT) infrastructure to improve efficiency.

₹550 million to fund the company's working capital requirements.

Additional funds for general corporate purposes.

IPO Subscription and Allotment Details

As of August 19, 2024, the first day of the IPO subscription, the Interarch IPO was subscribed 0.31 times. Investors interested in applying can track the live subscription status on NSE or BSE.

The IPO allotment is scheduled for August 23, 2024. To check the allotment status, investors can visit the registrar's website and enter their application details, PAN, or DP Client ID.

Company Overview and Promoter Background

Interarch Building Products Limited is recognized as one of the top players in the pre-engineered steel building industry in India. The company specializes in design, engineering, manufacturing, and on-site project management for the installation and erection of steel buildings.

The company is led by Arvind Nanda, the Managing Director, who has nearly 30 years of experience in the pre-engineered steel building sector. Another key figure is Gautam Suri, a Whole-time Director with a similar level of industry experience.

Conclusion: Should You Invest in Interarch IPO?

Considering the company’s solid financial performance, reasonable valuation metrics, and positive industry outlook, Interarch Building Products Limited IPO presents a viable investment opportunity for both listing gains and long-term investments. With its established presence in the steel building industry and its plans for further capacity expansion, the IPO is well-positioned to benefit from future growth in infrastructure development in India.

Investors are encouraged to evaluate their risk appetite and long-term objectives before making an investment decision.