Interarch Building Products shares surge 46% on IPO debut

Shares of Interarch Building Products made a strong debut on domestic bourses on Monday, with the stock price rising as much as 46% over the initial public offering price (IPO) post listing. The share price of Interarch Building Products listed at ₹1,299 on the NSE, a premium of 44.3% over the issue price of ₹900 apiece. On the BSE, the stock opened at ₹1,291.2, up 43.4% against the IPO price.

Extending listing gains, Interarch Building Products shares gained as much as 46.2% to hit a high of
₹1,316 on the BSE, while it touched a high of ₹1,314.80 on the BSE. At the time of reporting, the stock was trading at ₹1,221.65, up 35.74% over the IPO price, while the market capitalisation stood at ₹2,040 crore.

“This positive performance is attributed to the Interarch Building Products’ established market position, integrated manufacturing capabilities, and consistent financial growth,” says Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

“The IPO was well-received by investors, with a subscription rate of 93.79 times, indicating strong demand. This strong response reflects investor confidence in IBPL's continued growth and potential for success,” she says.

Nyati further adds the strong listing is a positive indicator of its future prospects. “So those who want to hold it for the long term are suggested to keep a stop loss at ₹1,200.”

The listing of Interarch Building Products was better than Street expectations as the stock was commanding grey market premiums (GMP) of ₹336 apiece in the unlisted market. The estimated listing price in the grey market was ₹1,236 per share.

The Noida-based turnkey pre-engineered steel construction solutions provider raised ₹600.29 crore via IPO, which was subscribed 93.79 times. The issue, which opened for subscription between August 19-21, was booked 19.46 times in the retail category, 197.29 times in QIB, and 130.91 times in the NII category.

The IPO consisted of a fresh issue of up to ₹200 crore and an offer for sale (OFS) of up to 44,47,630 equity shares by promoter and existing shareholders.

Out of the fresh proceeds of ₹200 crore, the company intends to use ₹58.53 crore for financing the capital expenditure towards setting up the project; ₹19.25 crore for financing the capital expenditure towards upgradation of the Kichha manufacturing facility, Tamil Nadu, Manufacturing Facility I, Tamil Nadu Manufacturing Facility II and Pantnagar Manufacturing Facility. Besides, ₹11.39 crore will be used to meet investment in information technology assets for upgradation of existing information technology infrastructure of the company, and ₹55 crore for funding incremental working capital requirements and general corporate purposes.

Incorporated in 1983, Interarch Building Products has more than three decades of experience in the pre-engineered steel buildings (PEB) industry, under the brands, TRAC and TRACDEK. As of March 31, 2024, Interarch Building Products' order book stood at ₹1,153.29 crore. The company’s revenue from operations stood at ₹1,293.30 crore and ₹1,123.93 crore in FY24 and FY23. Profit after tax rose from ₹81.46 crore in FY23 to ₹86.26 crore for the financial year 2024.

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