June 18, 2025
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Arisinfra Solutions IPO Review* by Paresh Gordhandas, CA & Research Analyst.
Arisinfra Solutions is a business-to-business (“B2B”) technology-enabled company operating in a growing construction materials market, focusing on simplifying and digitizing the entire procurement process for construction materials, delivering an efficient end-to-end procurement experience.
It utilizes a blend of technology and human expertise to simplify the procurement process for purchasing bulk quantities of various construction materials. It leverages its extensive network of vendors to source construction materials and provide them to real estate and infrastructure developers and contractors, striving to be a one-stop solution for all their construction material requirements.
Very small offer: The company has reduced its IPO size to Rs. 499.60 crore and retail portion is kept just 10%/ Rs. 49.96 crore. With only 33588 applications, retail portion will get one time subscribed.
Till 31 March 2024, the company has incurred losses. In the year 2024-25 (9 months) , it made profit of Rs. 6.53 crore. The company has debt equity ratio of 1.45 times which suggests higher borrowings at this juncture.
PtoIP Ratio: Premium to Issue price ratio is 18% and once the information about flow of applications comes, the premium is expected to move up.
Positives: Business of procuring large number of construction materials, more particularly aggregates is very complicated and time consuming for any developer/infra-company. Rate-negotiations, ensuring timely delivery etc. takes long hours for the developer and hence outsourcing of this activity is gaining momentum. Large number of develops like Lodha developers, Capacite Infra etc. have resorted to outsource the procurement process for purchasing bulk quantities of various construction materials. Arisinfra leverages its extensive network of vendors to source construction materials and provide them to real estate and infrastructure developers and contractors, striving to be a one-stop solution for all their construction material requirements, at better rates.
India is ranked the fifth largest economy in the world with a nominal GDP of Rs. 331 trillion (USD 3.9 trillion). Growing per capita income in India is a key driver towards upward mobility of the economy.
To reach the GoI’s target to “build a developed India” by 2047, it is focusing on key areas such as job creation, manufacturing, exports, agriculture, food processing, capital expenditure, ease of doing business, and women’s labour force participation. Over the last 3-5 years, big-ticket Government spending items included Transport, Energy and Rural development. All these areas involve heavy infrastructure development, clearly highlighting infrastructure as one of the key beneficiaries of the Government expenditure. The Government of India is set to spend nearly Rs. 143 lakh crores on infrastructure in seven fiscals through 2030, more than twice the approximately Rs. 67 lakh crores spent in the previous seven fiscals starting Fiscal 2017.
Growing Commercial real estate: India’s demand for commercial estate has seen a spurt in demand post COVID. Commercial real estate includes office spaces, retail spaces (malls, shopping malls, entertainment centres, etc.), industrial or warehouse spaces, hotels, etc. As per India Investment Grid, the commercial real estate sector of India is expected to grow at a CAGR of 13.8% by 2027.
Growing demand for Private real estate: Growing urbanisation owing to the migration of the younger and middle-class population seeking better opportunities and standards of living is leading to a high demand for private real estate. This shift has resulted in a decrease in the average household size from 4.3-4.4 in 2019 to 4.1-4.2 in 2024. Consequently, the number of households has increased by more than 29 million between 2019 and 2024, with an expected increase of approximately another 26 million by 2029.
The market for Infrastructure and real estate construction is segmented into Raw materials (RM), Finished Goods (FG) and other Value-Added Services (VAS) The RM segment consists of Steel, Aggregates, Cement, Concrete, Construction chemicals, Bricks/AAC blocks and other building materials. FG comprises of Paints, Electricals, Flooring, Plumbing and sanitaryware, Wood panels, Roofing, Electronic security, Doors, Windows, Glass, Hardware etc.
Construction raw materials is estimated to be a USD 235-275 billion market as of 2024 projected to grow at 5 8% CAGR to reach USD 310-360 billion by 2029 As per the First Advanced estimates of Budget Fiscal 2025, the Construction industry is estimated to contribute 9% to India’s GDP. Cement, Steel and other metals contribute 55-65% of the total raw material costs and are the major components of the construction industry. The growing construction materials market is set for a 5-8% CAGR during the period 2024 to 2029.
Arisinfra will be the sole organised listed player in this vast market of construction materials. The company has also entered into value added services which will open vast opportunities.
The size of the IPO is very small. Only Rs. 49.96 crore shares are offered to the RII. Huge oversubscription is anticipated for RII and HNI portions.
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all properties are mainly in Maldives, nd i dian goverment is not in favour of Maldives