The IPO segment is buzzing with action. The construction sector has a new name to watch on Dalal Street – ArisInfra Solution. A mainboard issue, the company has launched its maiden public issue on June 18, with a fresh issue of equity shares worth Rs 499.6 crore.

But is it a subscribe: Find out details about if you should and other highlights of the IPO

ArisInfra Solutions IPO: Rs 499 Cr fresh issue

ArisInfra Solutions is raising Rs 499.60 crore through a 100% fresh issue which means that no promoters are selling their stake here. The company is offering 2.25 crore new shares to the public, priced between Rs 210 and Rs 222 per share.

The minimum lot size is 67 shares, meaning a retail investor needs to put in Rs 14,070. For non-institutional investors, the minimum application size is 14 lots (938 shares) amounting to Rs 2,08,236 for sNII, and 68 lots (4,556 shares) amounting to Rs 10,11,432 for bNII.

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The IPO will close on June 20, with allotment likely on June 23. The company is expected to list on BSE and NSE on June 25.

ArisInfra Solutions IPO: Grey Market buzz

The grey market premium (GMP) for ArisInfra Solutions IPO is currently around Rs 25, taking the expected listing price to Rs 247 per share, a jump of 11.26% over the issue’s upper band of Rs 222.

While GMPs are not the official indicators, they often reflect investor sentiment ahead of the listing.

ArisInfra Solutions IPO Subscription status: Early interest seen

On Day 1 of the IPO, as of now, the issue was subscribed 0.07 times. Retail participation stood at 0.30 times, while institutional and NII segments are yet to gain momentum.

ArisInfra Solutions IPO: Know the business

ArisInfra Solutions founded in 2021, operates as a B2B digital procurement platform – helping builders and infra companies source materials like steel, cement, wires, pipes, and ready-mix concrete, all through a tech-led interface.

The company’s aim is to digitise construction material supply in India’s growing infra sector. Its product portfolio includes GI Pipes, MS TMT Bars, MS Wires, OPC cement, and more.

With government spending on infrastructure rising, ArisInfra is betting big on growth via technology and logistics.

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Who’s managing the issue?

The IPO is backed by some of the top names in the market. JM Financial, IIFL Capital Services, and Nuvama Wealth are the book-running lead managers, while MUFG Intime (formerly Link Intime) is acting as the registrar.

ArisInfra Solutions IPO: Key risks to watch

ArisInfra has flagged several key risks in its DRHP:

“We derive a significant portion of our revenues from the sale of aggregates, ready-mix-concrete (RMC), and steel… Any decline in the demand of these construction materials would have an adverse effect on our business.”

In other words, if the real estate and infra demand slows down, it could hit the company’s top line directly.

Another concern is geographic concentration. “We derive a substantial portion of our revenues from the states of Maharashtra, Karnataka and Tamil Nadu… any unfavourable developments in these states could adversely affect our business.”

Also, the company’s growth depends on building and retaining a solid network of customers and vendors. A slowdown there could be problematic. “If we fail to retain our customers and vendors… or fail to add new customers and vendors, our business… may be adversely affected.”

Furthermore, the company noted, “Delays or defaults in payment by the customers or a reduction in credit periods granted to us by the vendors could adversely affect our business.”

ArisInfra Solutions IPO: Expert analysis

Deven Choksey Research remain cautions about ArisInfra IPO and believes that the company’s valuation does not justify its business model when compared to peers.

“Globally, there are limited listed peers, which operate on a similar business model. Most of its listed peers domestically and globally operate in B2C format in large format stores to cater the retail consumers, which supports their higher margin profile. On comparing financial performance of the Company, with similar players catering to different consumer segment, ArisInfra’s initial offering at 48.3x annualized FY25 EV/EBITDA appears expensive to us. Accordingly, we recommend a “AVOID” rating to the issue,” said Deven Choksey Research in its IPO note.

Bajaj Broking also highlighted concerns regarding the company’s financial history and valuation multiples. Although ArisInfra posted a profit in 9M FY25, its prior years have been marked by losses.

“On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit/ – (LOSS) of Rs. 453.77 cr. / Rs. – (6.49) cr. (FY22), Rs. 754.44 cr. / Rs. – (15.39) cr. (FY23), and Rs. 702.36 cr. / Rs. – (17.30) cr. (FY24). For 9M of FY25 ended on December 31, 2024, it earned a net profit of Rs. 6.53 cr. on a total income of Rs. 557.76 cr. The company appears to have turned the corner for 9M of FY25, but actual trends may be known for entire FY25 numbers. Based on latest working the issue is aggressively priced, and based on working till FY24, the P/E is negative. Well-informed/cash surplus investors may park moderate funds for long term, others may simply stay away from this pricey bet.”