Interarch Building Products IPO: The initial public offering (IPO) of construction solutions provider Interarch Building Products Ltd is going to be closed on Wednesday, August 21. The price band of the IPO has been fixed at Rs 850-900 per share. Till 1:03 pm on the final day of bidding on Wednesday, the 600.29-crore IPO has received a 26.94 times subscription, garnering bids for 12,60,42,032 shares as against 46,77,881 shares on offer.
According to the latest data, the retail quota received a 13.77 times subscription, while the non-institutional investors category also got a 86.13 times subscription. The QIB category received a 5.73 times subscription.
The Interarch Building Products IPO will be closed on August 21. Its price band has been fixed at Rs 850-Rs 900 apiece. The share allotment will likely be finalised on August 22, while its listing will take place on the BSE and the NSE on August 26.
Interarch Building Products IPO GMP Today
According to market observers, unlisted shares of Interarch Building Products Ltd are trading Rs 354 higher in the grey market than its issue price. The Rs 354 grey market premium or GMP means the grey market is expecting a 39.33 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Interarch Building Products IPO: Analysts’ Recommendations
Brokerage firm Anand Rathi in its IPO note said, “Interarch Building Products Limited is ranked third in operating revenue from the PEB business in the Financial Year 2024 among integrated PEB players in India. Additionally, as of March 31, 2024, their company held the second-largest aggregate installed capacity at 141,000 MTPA, with a 6.5 per cent market share in terms of operating income in the financial year 2024 among integrated PEB players in India.”
Their manufacturing operations are highly vertically integrated, allowing them to participate across the entire product lifecycle of PEBs. This includes estimation, design, engineering, and fabrication of PEBs in completely knock-down condition at their manufacturing facilities, as well as the supply and on-site project management for the installation and erection of PEBs at customer sites, it added.
“The company’s P/E ratio is 17.4 times based on its FY24 earnings, with a market capitalization of ₹14,974.3 million after the issuance of equity shares and a market cap-to-sales ratio of 1.15 times its FY24 earnings. We believe that the issue is fairly priced, therefore we recommend ‘subscribe – Long Term’ rating to the IPO,” Anand Rathi stated.
Prashanth Tapse, senior vice-president (research), Mehta Equities Ltd, said, “We believe Interarch Building Products Ltd IPO brings investors a unique opportunity to investors to invest in a leading player in PEB segment. The company holds a strong market position, ranking 3rd in operating revenue with the 2nd largest installed capacity and commands a 6.5% market share. We think Interarch’s vertically integrated operations, from design to project management, combined with a robust track record of executing 677 PEB contracts, underscore its operational excellence. We also believe the company’s diverse and long-standing customer base across key industrial and infrastructure sectors further enhances its stability and growth prospects.”
By looking at the financials, the company has shown good growth in revenue from operations 34.61%/15.07% in FY 2023/2024, while the net profit saw a substantial increase from Rs.17.13 Cr in FY 2022 to 86.26 Cr in FY 2024. On valuation parse at the upper price band of Rs.900/-, the issue is asking for a market cap of Rs.1498 Cr. Based on FY 2024 earnings and fully diluted post-IPO paid-up capital, the company is asking for PE of 17.36 which seems reasonable priced by looking at it financial performance and market position, he added.
“Given the company’s integrated manufacturing operations and proven execution, along with a diverse customer base, Interarch is well-positioned to capitalise on the expanding demand for PEBs in India. Hence, we recommend investors to ‘SUBSCRIBE’ the Interarch Building Products Ltd IPO for long-term perspective. As the company is the second largest PEB player in India, we believe the market could give Interarch a premium multiple towards its leadership position; this may result in delivering healthy listing gains of over above 25% on its issue price,” Tapse said.
Interarch Building Products IPO: More Details
The initial public offer (IPO) has a fresh issue of up to Rs 200 crore and an offer for sale of up to 44,47,630 equity shares.
The price range for the offer is fixed at Rs 850-900 per share. The initial public offer of Interarch Building Products was fully subscribed on the first day of subscription on Monday.
The initial share sale will conclude on August 21.
Proceeds from the fresh issue will be used for capital expenditures, system upgrades and general corporate purposes.
Interarch Building Products 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.
Ambit Private Limited and Axis Capital are the book-running lead managers to the offer.
The equity shares are proposed to be listed on BSE and NSE.
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