ArisInfra FY24: IPO-Bound Startup’s Loss Widens 12% To INR 17 Cr, Revenue Down 6.5%

IPO-bound B2B ecommerce platform ArisInfra Solutions’ consolidated net losses rose 12% to INR 17.33 Cr in the financial year 2023-24 (FY24) from INR 15.48 Cr loss it incurred in the previous financial year. 

The startup, which recently filed its draft red herring prospectus (DRHP) to raise INR 600 Cr via IPO, saw its operating revenue decline 6.5% during the year under review. ArisInfra’s revenue from operations stood at INR 696.84 Cr in FY24 as against INR 746.07 Cr in the previous fiscal. 

Founded in 2021 by Ronak Morbia and Bhavik Khara, ArisInfra uses AI and machine learning to simplify construction material procurement. The platform links property developers with vendors, digitising the construction industry’s supply chain.

ArisInfra has contracts with customers to provide project management services and its related services and earns commission income from them.

Including other income, the startup’s total revenue declined 6.9% to INR 702.35 Cr during the year under review from INR 754.43 Cr in FY23.

The startup’s loss increased during the year under review primarily due to fair value loss on derivatives of INR 20.55 Cr. Excluding this, it would have posted a net profit of INR 3.22 Cr in FY24. 

It must also be highlighted that ArisInfra’s ESOP expenses stood at INR 5.14 Cr in FY24. 

Meanwhile, the startup achieved EBITDA profitability during the year under review. Its EBITDA stood at INR 13.01 Cr as against an EBITDA loss of INR 10.9 Lakh in the previous year. EBITDA margin stood at 5.56% in FY24.

It said that its revenue for the year decreased primarily due to a “strategic shift in our product mix, with emphasis on the sale of products which offer higher margins and increased focus on the sale of our third-party manufactured construction materials”.

Zooming Into ArisInfra’s Expenses

In line with the fall in revenue, the startup managed to trim its expenses. Its total expenditures decreased 7% to INR 719.19 Cr in FY24 from INR 772.67 Cr in the previous fiscal year. 

Purchase Of Stock-In-Trade: The expense under this head declined 9.6% to INR 612.44 Cr from INR 671.42 Cr in FY23. 

Cost Of Materials Consumed: The startup saw a sharp 98% reduction under this head to INR 20.2 Lakh in FY24 from INR 13.31 Cr in the previous fiscal year. 

Employee Benefits: Employee costs zoomed 51% to INR 30.3 Cr from INR 20.03 Cr in FY23.

This indicates that the startup likely increased its headcount during the year under review. As per its DRHP, ArisInfra had 187 permanent employees as of July 31, 2024.

Finance Cost: The startup’s finance costs grew 35% to INR 30.3 Cr in FY24 from INR 20.03 Cr in the previous year. 

A Quick Look At ArisInfra’s IPO Bid

ArisInfra’s INR 600 Cr IPO will comprise only a fresh issue of shares.

Beside founders Morbia and Khara, the startup counts Pharmeasy CEO Siddharth Shah and kin Jasmine Bhaskar Shah, Priyanka Bhaskar Shah, Bhaskar Shah, Aspire Family Trust and Priyanka Shah Family Trust among its promoters.

ArisInfra converted into a public entity on May 31, 2024, by dropping the “Private” from its legal name Arisinfra Solutions Private Limited. 

The startup delivers the products from the manufacturers of raw materials to the customers and doesn’t store the raw materials. 

“We leverage our extensive network of vendors to source construction materials and provide them to real estate and infrastructure developers and contractors, striving to be a one-stop solution for all their construction material requirements,” it said in the DRHP. 

When a customer submits a request for a quotation on the startup’s platform, it generates a list of suitable vendors from its vendor network based on factors including their location, proximity to customers, credit terms and previous order fulfilment performance. 

The platform analyses and aggregates all the vendor bids on the basis of their price and credit terms before sharing a one price quotation with the customer for the construction materials requested.

It operates in 900 pincodes and 18 Indian states. It said that its customer base stood at 2,133 and vendor count stood at 1,458 as of March 31, 2024. Its clients include The Wadhwa Group, ACC, Piramal Realty, Tata Projects, JSW Cements, among others. 

It claims that it has delivered 10.35 Mn metric tonnes of construction materials, including aggregates, ready-mix concrete, steel, cement, construction chemicals and walling solutions, since inception. 

In the construction delivery marketplace space, it competes with behemoths like Infra.Market, OfBusiness, Moglix, Zetwerk, among others. According to the DRHP, ArisInfra’s revenue is less than all of the aforementioned startups.

The filing of the DRHP comes at a time when a number of Indian startups are looking to list on the exchanges amid the ongoing IPO boom. ArisInfra’s rival OfBusiness is also said to have started discussions with investment bankers for its IPO next year. Meanwhile, Infra.Market is also eyeing a $300 Mn to $400 Mn public offering.

Update | August 21, 09:15 PM: The story has been edited to add fair value loss and EBITDA numbers for FY24.