Interarch Building Products Ltd. (IBPL) IPO: Pioneering Growth in India’s Pre-Engineered Building Sector

Interarch Building Products Ltd. (IBPL) is a distinguished leader in India’s pre-engineered steel construction landscape. Known for delivering comprehensive turnkey solutions, IBPL excels across the board in design, engineering, manufacturing, and on-site project management specifically tailored for pre-engineered buildings (PEBs). As per a CRISIL report, IBPL secured the third spot in operating revenue within the PEB business in FY23, while it also boasted the second-largest installed capacity, reaching 141,000 metric tonnes per annum (MTPA) as of March 31, 2024. The company commands a 6.5% market share in India’s integrated PEB sector, which underscores its robust presence and influence within the industry.

IBPL’s PEB solutions are customized to cater to the unique requirements of clients across various sectors, including industrial, infrastructure, and residential projects. The company has a commendable track record, having completed 677 PEB contracts from FY15 to FY24. IBPL’s expertise is well-demonstrated through its involvement in diverse projects, ranging from multi-level warehouses designed for e-commerce to expansive structures for indoor stadiums.

The Indian PEB industry is on a growth trajectory, with an expected compound annual growth rate (CAGR) of 11-12% from FY24 to FY29. This presents a substantial growth window for IBPL, especially given its integrated capabilities that span in-house design and engineering to manufacturing and on-site project management. IBPL’s extensive service offerings, which include turnkey PEB contracts and the sale of pre-engineered steel materials, are designed to meet a wide array of client needs.

Founded in 1983, IBPL has over three decades of experience in the PEB sector, establishing strong brand recognition through its well-known “TRAC®” and “TRACDEK®” brands. By March 31, 2024, IBPL’s operational scale was reflected in its employment of 2,114 staff and 381 contract laborers.

Looking toward the future, IBPL is preparing for its Initial Public Offering (IPO), which includes a fresh equity issue worth INR 200 crore and an Offer for Sale (OFS) of INR 400.29 crore. The IPO, priced between INR 850 and INR 900 per share, is set to open on August 19, 2024, and close on August 21, 2024. The proceeds from the IPO are earmarked for capital expenditure projects, IT system upgrades, working capital, and general corporate purposes. Post-IPO, IBPL’s market capitalization is anticipated to rise to INR 1,497.43 crore.

Financially, IBPL has demonstrated impressive growth, with total income increasing from INR 840.86 crore in FY22 to INR 1,306.32 crore in FY24. However, it is worth noting that the IPO is considered fully priced, with a price-to-earnings (P/E) ratio of 17.36 based on FY24 earnings.

With a strong order book and a proven track record, IBPL stands out as an attractive investment opportunity for medium to long-term investors seeking to capitalize on the expanding Indian PEB industry.