Tech startup Infra.Market in talks to appoint i-banks for $300-400 million IPO

Tech startup Infra.Market in talks to appoint i-banks for a $300-400 million IPO

Infra.Market, a tech startup that supplies construction and building materials, has initiated exploratory talks with investment banks for its public market debut, sources aware of the development told Moneycontrol.

Founded by Souvik Sengupta and Aaditya Sharda in 2016, the Tiger Global, Accel and Nexus Ventures backed startup sells cement, aggregates, steel, plywood, pipes and fittings, construction chemicals, etc, on its platform.

“They have been engaging with bankers and are likely to soon call for formal pitches for the IPO mandate,” said one of the sources cited above. The company is likely to pick a syndicate of four to five investment banks to manage its IPO.

The size of the IPO, which will be a mix of primary and secondary share sales, is likely to be around $300-400 million, sources said. However, they added that since the IPO discussions are at an early stage, these numbers are likely to change.

A part of the primary capital to be raised from the proposed IPO will be used to repay debt raised for both organic and inorganic growth, the sources said.

A spokesperson for Infra.Market declined to comment.

Strategic investments

Over the past few years, Infra.Market has grown inorganically, making several strategic investments to cement its business in key product categories.

In September 2021, it acquired RDC Concrete, the largest non-cement ready mix concrete company in India, from private equity firm True North for Rs 730 crore.

Last year, the company divested 10 percent of its stake worth around $20 million in RDC Concrete to Ashish Kacholia and other investors.

Also Read: RDC Concrete plans to go public next year with valuation up to Rs 4,000 crore

In 2021, the company acquired Equiphunt, a Hyderabad-based construction equipment rental service company for around $10 million.

In January 2022, Infra.Market invested Rs 270 crore in Shalimar Paints Ltd to buy a 24 percent stake in the company.

Last year, it acquired a majority stake in Strata Geosystems, a technical textiles maker, for Rs 910 crore.

Financials

As per a credit rating report by India Ratings, Infra.Market’s parent entity, Hella Infra Market Pvt Ltd, reported revenue of around Rs 11,850 crore in FY23, as against revenue of around Rs 6,230 crore in the previous fiscal.

In FY23, its earnings before interest, taxes, depreciation and amortisation grew to approximately Rs 750 crore from around Rs 340 crore in the previous year.