Management

• Ronak Kishor Morbia (Chairman and Managing Director)
• Bhavik Jayesh Khara (Whole-time Director)
• Manish Kumar Singh (Non-Executive Partner)
• Ramakant Sharma (Independent Director)
• Ravi Venkatraman (Independent Director)
• Gitanjali Rikesh Mirchandani (Independent Director)
• Srinivasan Gopalan (Chief Executive Officer)
• Latesh Shailesh Shah (Company Secretary and Compliance Officer)
• Amit Manhar Gala (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs.499.60 cr, which comprises of an entire fresh issue of Rs. 499.60 cr with no offer for sale (OFS) component. The company intends to utilize a portion of the Net Proceeds towards Repayment / prepayment, in full or part, of certain outstanding borrowings availed by the Company (~Rs 204.60 cr), Funding the working capital requirements of the Company (177 cr), Investment in the Subsidiary, Buildmex-Infra Private Limited, for funding its working capital requirements (Rs 48 cr) and remaining for general corporate purposes and unidentified inorganic acquisitions.

Industry

India’s Infrastructure Focus and Government Spending Momentum A key growth catalyst for the coming decade is the Government of India’s (GoI) emphasis on nation-building, aiming to make India a developed nation by 2047. The GoI is investing heavily in sectors such as job creation, manufacturing, exports, food processing, and capital expenditure, with infrastructure emerging as the primary beneficiary. Between FY2024 and FY2030, India plans to spend nearly Rs 143 lakh cr on infrastructure, more than double the Rs 67 lakh cr spent between FY2017 and FY2023. Key sectors attracting this investment include transport, energy, and rural development. In parallel, the GoI is easing Foreign Direct Investment (FDI) norms, resulting in the construction sector (including both construction development and infrastructure activities) ranking among the top three FDI recipients in the past three years. While sectors like software and hardware saw a dip in FDI inflow, the construction sector registered higher FDI in FY24 compared to FY22, underlining its growing strategic significance.

Infrastructure-Driven GDP Growth and Rising Real Estate Demand India’s infrastructure development is central to its economic growth strategy, with Gross Fixed Capital Formation (GFCF) growing at a 13% CAGR from FY2019 to FY2024 and contributing 31% to GDP in FY24. As per Invest India, studies show that every Rs 1 spent on infrastructure yields Rs 2.5–3.5 in GDP gains. The World Bank estimates a requirement of Rs 71.4 trillion over 10–15 years to meet urban infrastructure demands. Connectivity-focused initiatives such as the Char Dham Pariyojana and Ayodhya Airport have improved logistics and tourism, boosting construction. Urban migration continues to drive commercial and private real estate growth. India’s commercial real estate market is projected to grow at a 13.8% CAGR by 2027, supported by REITs and RERA regulations. REITs, with assets over Rs 1.5 lakh cr and catering to 2.5 lakh investors, are enhancing liquidity and accessibility. On the private real estate front, household sizes are shrinking, adding 29 million new households since 2019, and 26 million more are expected by 2029.

B2B Market Growth, MSME Evolution, and Digital Enablers India’s Industrial B2B market, worth USD 495–545 billion, accounts for 35–40% of the Retail + Industrial B2B space, and is expected to grow at 12–14% CAGR till 2029. The market remains highly fragmented, led by MSMEs, which number 75–80 million in 2024 and contribute ~30% to GDP. MSME growth is bolstered by GoI schemes like CGTMSE, which approved credit guarantees worth over Rs 2 trillion in FY24, up 94% YoY. Digitisation is accelerating across the B2B landscape. UPI saw Rs 24.8 lakh cr in transactions in March 2025 alone. GST and the eWay Bill have streamlined compliance and logistics tracking, enhancing operational transparency for B2B marketplaces. Monthly eWay Bills rose to 15.7 cr by Jan 2025, more than double 2018–19 levels. As B2B evolves from offline to digital-first models, initiatives like OCEN and TReDS are fostering tech-led, transaction-based marketplaces with personalised, end-to-end services for buyers and sellers across the construction and industrial supply chain.

Competitive Strengths

Leveraging Technology to Transform the Construction Supply Chain Arisinfra is a B2B technology-enabled company, simplifying and digitizing the procurement process for construction materials. Powered by advanced tools such as artificial intelligence and machine learning, they are streamlining the supply chain by minimizing the need for multiple intermediaries. Key features which combine their technological capabilities and human expertise to ensure efficiency at every stage of the construction material procurement process.

Deal Finalization They leverage technology to efficiently connect with multiple vendors, requesting quotes for required construction materials within minutes.

Delivery Management They integrated delivery management system, ‘ArisDelivery’ enables their operations team to streamline the delivery of construction materials. This system allows them to initiate deliveries using purchase orders in the system with minimal data input and provide real-time updates to customers, ensuring coordination, smooth deliveries and a seamless procurement experience.

Document Digitization By leveraging artificial intelligence and machine learning, they have transformed the documentation process through digitizing and providing real-time access to documents such as delivery challans and weighbridge slips.

Data Analysis Empowers Informed Decisions They collect, monitor and analyze data from various touchpoints on a deal. This includes tracking information starting from the RFQ to vendor responses, logistics provider selection and decisions made by their executives to accept or reject deals based on margins, payment terms and credit risk analysis.

Positioned to Tap a High-Growth Construction Market Arisinfra operates with a diversified model that includes sourcing materials from external vendors and supplying them to real estate and infrastructure developers. Additionally, they offer third-party manufactured products. Their tech-led infrastructure supports high transaction volumes, allowing them to efficiently serve a rapidly growing customer and vendor base. This ability to manage large-scale, multi-party transactions places Arisinfra in a strong position to capture significant market share in India’s fragmented and unorganized construction materials sector. Their growth demonstrates the value of their tech-driven operations and reinforces their capability to offer a seamless procurement experience. The company’s digitized backend allows real-time processing, which enhances reliability and customer satisfaction. With technology at the core of operations, Arisinfra reduces turnaround time, improves compliance tracking, and positions itself as a scalable and cost-effective alternative to traditional procurement systems in the construction space.

Expansion in Third-Party Manufactured Construction Materials In Fiscal 2023, Arisinfra expanded into third-party manufacturing, covering aggregates, ready-mix concrete (RMC), and aerated concrete blocks (walling solutions). This move has enhanced supply reliability and revenue potential while decreasing dependence on external suppliers. By manufacturing through third parties, they maintain flexibility without heavy capital investments. This strategy improves cash flows, enhances margins, and reduces intermediary costs. It also provides better control over the supply chain and product availability, helping fulfill large orders efficiently. As a result, Arisinfra not only diversifies its revenue base but also builds stronger supplier relationships and gains better visibility in the construction materials market. Their expanding product portfolio under third-party manufacturing complements their core B2B procurement offering and helps ensure a consistent and dependable supply. This evolution in business operations demonstrates their intent to deepen integration in the supply chain and tap into broader value-added revenue streams.

Strong Network Effects Driving Business Momentum Arisinfra benefits from powerful network effects where customer and vendor growth reinforce each other. As more customers join the platform, demand for materials increases, which attracts additional vendors. This growing vendor base, in turn, enhances material variety and supply availability, encouraging further customer onboarding. This self-reinforcing cycle boosts market reach and competitive strength. The number of vendors surged from 441 in March 2022 to 1,729 by December 2024, while customer count grew from 431 to 2,659 in the same period. Repeat customer engagement is strong, with 848, 934, 920, and 366 recurring customers in the 9 months ending December 2024 and in Fiscals 2024, 2023, and 2022, respectively. These figures represent retention rates of over 70% across years. Such sustained engagement underscores the stickiness of Arisinfra’s platform and reflects the value it offers both vendors and customers across India’s construction materials ecosystem.

Comprehensive Credit Risk Management Through Technology Arisinfra has implemented a robust technology-based framework for credit risk analysis to support financial stability and operational efficiency. They generate real-time business intelligence reports using an integrated messaging application. These reports highlight key metrics and support informed decision-making. Their system digitizes and maintains detailed ledgers, tracking deliveries and corresponding proofs to ensure payment traceability. Efficient payment collection mechanisms and credit monitoring tools allow the company to manage receivables and limit financial exposure. AI and ML tools analyse customer behaviour, payment patterns, and order history to detect risks early and guide decisions on pricing and deal approvals. This approach balances growth with prudent risk management, particularly important given the time lag between vendor payments and customer collections. By embedding data-driven credit controls into daily operations, Arisinfra maintains business continuity and ensures margin protection while scaling its B2B operations in the construction industry.

Key Risks & Concerns

• Business concentration: The company earns a significant portion of its revenue from aggregates, ready-mix concrete (RMC), and steel, which comprised 31.19%, 21.12%, and 16.13% of their operating revenue for Fiscal 2024. Decreased demand for any of these materials could adversely affect the company's financial condition and cash flows.
• Geographical concentration: The company’s operations are concentrated mainly in Maharashtra, Karnataka, and Tamil Nadu, contributing to more than 80% of its sales in the last three years. As a result, any adverse developments in these states could materially impact their business performance.
• Client concentration: The company's reliance on key customers, with its top 10 clients contributing 45.24% in FY24, 39.07% in FY23, and 47.19% in FY22 of total revenue, poses a risk due to the absence of long-term contracts and potential revenue volatility.
• Low barriers to entry: ArisInfra operates in the digital construction material procurement market which is characterized by relatively low barriers to entry which may lead to pricing pressure that may adversely impact their business, results of operations, financial condition and cash flows.
• Competitive industry: The nature of the industry is highly competitive; hence there is pressure on suppliers to lower the prices or offer additional services to win contracts which in turn impacts their profitability.

Outlook and Valuation

ArisInfra Solutions Ltd is a B2B tech-enabled company digitizing construction materials procurement for real estate, infrastructure, and contracting firms, offering an end-to-end solution across materials like aggregates, RMC, steel, cement, and construction chemicals. ArisInfra’s business model blends technology, vendor aggregation, and data-driven decision-making to solve key challenges in India’s construction material procurement space. Acting as both a procurement aggregator and third-party manufacturer, it leverages an AI/ML-powered platform to deliver value-added services—growing from Rs.8.47 Cr in FY23 to Rs.32.04 Cr in 9MFY25. Backed by strong macro tailwinds, including Rs.143 lakh Cr in planned infrastructure spending by FY30, rising FDI, and supportive government initiatives, ArisInfra is well-positioned for growth. Its focus on optimizing cash flow and serving both bulk and value-driven demand further strengthens its role as a strategic partner in India’s infrastructure expansion.

The IPO comes at a time when Arisinfra has built a compelling foundation to scale across India's vast and fragmented construction supply chain. Its entry into third-party manufacturing of ready-mix concrete (RMC), aggregates, and walling materials has not only boosted top-line growth but also improved control over quality, pricing, and availability. This strategy, coupled with low capital intensity, enhances cash flow stability and strengthens its margin profile. The company’s leadership; with deep domain expertise and strong execution capability, has successfully created a platform that digitized over 1.2 lakh documents in 9MFY25 alone, reflecting significant operational scale. However, despite these positives, the company has only recently turned profitable in 9MFY25 after reporting net losses in FY22, FY23, and FY24. Revenue visibility remains inconsistent, and profitability is yet to stabilize. Moreover, high finance costs continue to impact bottom-line growth, and earnings per share (EPS) trends do not indicate sustained momentum. The company is valued at 9MFY25 annualised EV/EBITDA multiple of 40x at post issue capital of upper price band. Thus, the issue is aggressively priced given the company’s volatile track record of growth, profitability and elevated risk profile. While the business model is innovative and macro tailwinds are supportive, the lack of consistent earnings growth and high leverage make the current valuation difficult to justify. Therefore, we assign AVOID rating to the issue.