ArisInfra Solutions IPO sails through on day 2; GMP takes a hit

The initial public offering (IPO) of Mumbai-headquartered ArisInfra Solutions managed to sail through on the second day of bidding, thanks to HNI and retail push. The issue had commenced on Wednesday, June 18, 2025 and ended day one with 26 per cent subscription.

The company has established a price band for its shares ranging from Rs 210 to Rs 222 each. Investors have the option to apply for a minimum lot size of 67 shares. The IPO aims to raise Rs 499.60 crore entirely through a fresh issuance of 2,25,04,324 equity shares.

According to the data, the investors made bids for 1,20,30,252 equity shares, or 92 per cent, compared to the 1,30,84,656 equity shares offered for the subscription by 3.30 pm on Thursday, June 19, 2025. The three-day bidding for the issue shall conclude on Friday, June 20.

The allocation for retail investors was subscribed 2.62 times, while the portion reserved for non-institutional investors (NIIs) saw a subscription of one time. However, the quota set aside for qualified institutional bidders (QIBs) was booked 31 per cent of their allocation as of the same time.

The IPO's grey market premium (GMP) has faced challenges due to volatile market conditions. The most recent GMP stood at Rs 22 per share, down from Rs 25 at the start. This suggests potential listing gains of under 10% for investors.

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. It relies on short-term borrowings to fund its working capital requirements, which has a severe impact on the profitability, said KR Choksey Finserv.

"On comparing financial performance of the company, with similar players catering to different consumer segment, ArisInfra’s initial offering at 48.3 times annualized FY25 EV/EBITDA appears expensive to us. Accordingly, we recommend a 'avoid' rating to the issue," it added.

JM Financial, IIFL Capital Services, and Nuvama Wealth Management are the lead managers, with MUFG Intime India (Link Intime) serving as the registrar.

ArisInfra pursues growth by entering new micro markets in existing and untapped geographies, boosting market penetration in India’s fragmented $235–255 Bn construction materials sector. It capitalizes on the unorganized market’s inefficiencies, leveraging its technology platform, credit-linked pricing, and advanced hardware for enhanced efficiency, said Arihant Capital.

"With a robust network and scalable model, ArisInfra strengthens its position as a leading B2B solution, addressing challenges for vendors and customers alike. The issue is valued at P/E ratio of 206.7 times, based on a FY25 EPS of Rs 1.1. We are recommending a 'neutral' rating for this issue," it said.

Established in 2021, ArisInfra Solutions is a B2B technology-driven entity focused on the construction materials sector. It aims to simplify procurement and offer financial management solutions for construction and infrastructure firms. Despite its innovative model and asset-light approach, the company faces challenges from high competition, steep valuations, and an uncertain path to profitability.

For the nine months ending on December 31, 2024, ArisInfra Solutions reported a net profit of Rs 6.53 crore, with revenues of Rs 557.76 crore. However, for the fiscal year 2023-24, it incurred a net loss of Rs 17.30 crore on revenues amounting to Rs 702.36 crore. Following the IPO, the company is anticipated to have a market capitalisation near Rs 1,800 crore.investors.