ArisInfra Solutions IPO: Check out 10 key things to know from RHP before investing

ArisInfra Solutions IPO opens for subscription on Wednesday, June 18, and closes on Friday, June 20. ArisInfra Solutions Limited is a modern platform created to help construction and infrastructure companies purchase materials easily and manage their finances wisely.

Operating as a technology-driven business-to-business (B2B) company in the expanding construction materials industry, ArisInfra seeks to digitalise and optimise the procurement process, delivering a comprehensive end-to-end experience for its clients. The products offered include GI pipes (Steel), MS Wire (Steel), MS TMT Bars (Steel), OPC Bulk (Cement), and other materials.

Arisinfra Solutions IPO consists of a fresh issue of 2,25,04,324 equity shares, aggregating to ₹499.60 crore. There's no offer for sale (OFS) component.

Arisinfra Solutions IPO intends to use the net proceeds from the offering for various purposes, such as repaying or prepaying loans, meeting the Company's working capital requirements, investing in its subsidiary, and supporting general corporate initiatives, along with possible unidentified acquisitions.

JM Financial Limited, IIFL Capital Services Limited, and Nuvama Wealth Management Limited are the book-running lead managers for the Arisinfra Solutions IPO, while MUFG Intime India Private Limited (Link Intime) serves as the registrar for the offering.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of ArisInfra Solutions share price is indicated at ₹247 apiece, which is 11.26% higher than the IPO price of ₹222.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

ArisInfra Solutions IPO - Promoters

The promoters of the company include Ronak Kishor Morbia, Bhavik Jayesh Khara, Siddharth Bhaskar Shah, Jasmine Bhaskar Shah, Priyanka Bhaskar Shah, Bhaskar Shah, Aspire Family Trust, and Priyanka Shah Family Trust. As of the date of this Red Herring Prospectus, the promoters together own 24,455,430 equity shares, which accounts for 41.10% of the total issued, subscribed, and paid-up capital on a fully diluted basis of the company.

ArisInfra Solutions IPO - Peers

There are no publicly traded companies, either in India or internationally, that operate in a manner comparable to this company. Hence, an industry comparison concerning the company cannot be provided.

ArisInfra Solutions IPO - Business

The company operates as a technology-enabled business-to-business (B2B) entity in an expanding market for construction materials, according to the RedSeer Report, with an emphasis on streamlining and digitizing the complete procurement process for these materials, thus providing a seamless end-to-end procurement experience. The firm combines technology and human knowledge to facilitate the procurement process involved in acquiring large quantities of different construction materials.

ArisInfra Solutions IPO - Group Companies

Priyanka Medical Private Limited and Jasper Build-Tech Solutions Private Limited, which was previously known as Amplywealth Solutions Private Limited, have been recognised as their associated companies.

ArisInfra Solutions IPO - Customers

The company serves a clientele that consists of major real estate and infrastructure developers and contractors, including Capacit’e Infraprojects Ltd, J Kumar Infraprojects Ltd, Afcons Infrastructure Ltd, EMS Ltd, S P Singla Constructions Private Ltd, RealGem Buildtech Private Ltd, Wadhwa Group Holdings Private Ltd, Casa Grande Civil Engineering Private Ltd, Sheth Creators Private Ltd, Puranik Builders Ltd, and Transcon Iconica Private Ltd.

ArisInfra Solutions IPO - Industry

The market for construction materials in India offers a considerable opportunity due to its disorganized and fragmented nature, along with the lack of many major organised players, which leads to several challenges for vendors and customers, according to the RedSeer Report. These challenges are being addressed as they revolutionise the B2B construction materials landscape by reducing the reliance on multiple intermediaries in the procurement process, as highlighted in the RedSeer Report.

Additionally, B2B technology-enabled firms like ArisInfra Solutions have the ability to improve profit margins by removing intermediaries and minimizing inefficiencies within the ecosystem, making us a cost-effective, technology-driven alternative to traditional B2B procurement methods for construction materials.

ArisInfra Solutions IPO - Delivery Update

Between April 1, 2021, and December 31, 2024, the company has supplied 14.10 million metric tonnes (MT) of construction materials, which include aggregates, ready-mix concrete (RMC), steel, cement, construction chemicals, and walling solutions, by partnering with 1,729 vendors and serving 2,659 customers across 1,075 pin codes in various cities such as Mumbai (Maharashtra), Bengaluru (Karnataka), and Chennai (Tamil Nadu).

ArisInfra Solutions IPO - Financials

For the nine-month period ending December 31, 2024, during fiscal years 2024, 2023, and 2022, ArisUnitern's revenue derived from value-added services amounted to ₹320.41 million, ₹247.87 million, ₹84.67 million, and ₹0, respectively, representing 5.86%, 3.56%, 1.13%, and 0% of their total revenue from operations.

ArisInfra Solutions IPO - Key Risks

Some of the key risks are as follows;

• The expansion of their business and revenue relies on their capacity to further develop their network of customers and vendors. If the company does not successfully maintain their existing customers and vendors or does not secure new ones, their business performance, financial health, and cash flow could be negatively impacted.
• Hiccups or failures in receiving payments from customers, or a decrease in the credit terms allowed by suppliers, may negatively impact their operations, financial performance, overall financial health, and cash flow.

Lock-in of equity shares allotted to anchor investors

Half of the Equity Shares allocated to Anchor Investors will have a lock-in period of 30 days starting from the date of allotment, while the other half will be subject to a lock-in period of 90 days from the date of allotment.

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