Interarch Building Products Limited is one of the leading turnkey pre-engineered steel construction solution providers in India with integrated facilities for design and engineering, manufacturing, on-site project management capabilities for the installation and erection of pre-engineered steel buildings ('PEB'). They were ranked third in terms of operating revenue from PEB business in the Financial Year 2023 among integrated PEB players in India as per CRISIL Report. The Company further had the second largest aggregate installed capacity of 1,41,000 metric tonnes per annum ('MTPA') as at 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 as per CRISIL Report. The PEB offerings are designed, engineered and fabricated by them in accordance with customer requirements, and find use in construction for industrial, infrastructure and building (residential, commercial and non-commercial) end-use applications. They have delivered PEBs for projects ranging from multi-level warehouses for customers engaged in e-commerce to paint production lines for customers engaged in manufacturing of paints and, fast-moving consumer goods ('FMCG') sector for setting up manufacturing units for manufacturing their products. They have also supplied large-span PEBs for indoor stadiums and customers engaged in the cement industry. During the from Financial Year 2015 to Financial Year 2024, they completed execution of 677 PEB Contracts, thereby demonstrating the extensive track record in the PEB industry. Company primarily manufactures the products in-house at their four manufacturing facilities, comprising two Manufacturing Facilities in Sriperumbudur, Tamil Nad, and one each in Pantnagar, Uttarakhand and Kichha, Uttarakhand, As at March 31, 2024 the Manufacturing Facilities had an aggregate installed capacity of 141,000 MTPA. The Manufacturing Facilities are supplemented by three dedicated design and engineering centres situated in Noida, Uttar Pradesh; Chennai, Tamil Nadu; and Hyderabad, Telangana. They have established eight sales and marketing offices in eight cities to cater to the customers across India. They are also in the process of setting-up a manufacturing unit as part of the phase 1 of the Planned Andhra Pradesh Manufacturing Facility and also propose to undertake the Project and also upgrade the Kichha Manufacturing Facility, Tamil Nadu Manufacturing Facility I, Tamil Nadu Manufacturing Facility II and Pantnagar Manufacturing Facility by utilizing a portion of the Net Proceeds, in order to bolster the manufacturing capacity and capabilities. The capacity utilisation of total installed capacity in FY22, FY23 and FY24 were respectively 45.61%, 49.23% and 60.64%. As per financial performance, Interarch Building Products Limited has posted total income / net profits of Rs 840.86 Cr / Rs 17.13 Cr (FY22), Rs 1,136.39 Cr / 81.46 Cr (FY23) and Rs 1,306.32 Cr / Rs 86.26 Cr (FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs 49.35 and average RoNW of 20.12% for last three fiscals. Issue is priced at a P/BV of 3.35 as per NAV of Rs 268.8/- as on 31.03.24. If we attribute latest earnings of FY22, FY23, and FY24, then asking price is at a P/E of around 87.40, 18.38, and 17.36 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, two lead managers are associated with this IPO, and have handled around 42 IPOs in last three fiscals. Ambit Private Limited: This is 5th IPO from this BRLM. From last 4 IPOs, all opened above issue price on the day of listing. As of now, from last 4 IPOs, all are trading above issue price. (As on 13.08.24) Axis Capital Limited: This is 39th IPO from this BRLM. From last 10 IPOs, one opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 IPOs, one is trading below issue price and remaining are trading above issue price. (As on 13.08.24) As per financials, Interarch Building Products Limited has shown good results, RoNW is 22.26% and P/E is 87.40, 18.38 and 17.36 respectively as per FY22, FY23, and FY24 earnings. So, issue looks fairly priced. Company is in business of design and engineering, manufacturing, on-site project management capabilities for the installation and erection of pre-engineered steel buildings ('PEB'), which is a very fragmented and competitive business segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
✍️ Post a Comment