Interarch Building Products IPO: The Initial Public offer that opened for subscription today (19, August 2024) will close on 21 August. Here are 10 key risks from the RHP you should know before investing-
1.Interarch Building Products business and profitability are substantially dependent on the availability and the cost of its raw materials and components consumed, including steel, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices o fraw materials may adversely impact Interarch Building Products business, results of operations, financial condition and cash flows.
2.The operation of Interarch Building Products depends on its production facilities and will continue to do so. The manufacturing process has some risks. Its business, operating results, financial situation, and cash flows could all be negatively impacted by any interruption, delay, or stoppage of its manufacturing operations..
3. Interarch Building Products depend on a limited number of third party suppliers for the uninterrupted supply of raw materials and do not have continuing or exclusive arrangements with any of its suppliers. Loss of suppliers or any failure by its suppliers to make timely delivery of raw materials may have an adverse effect on its business, results of operations, financial condition and cash flow
4.Interarch Building Products derive a significant portion of its revenues from repeat Orders which they identify as orders placed by customers or customer groups (identified as customers forming part of the same corporate group) that have placed orders with the company previously. Any loss of, or a significant reduction in the repeat orders received by Interarch Building Products could adversely affect its business, results of operations, financial condition and cash flow.
5. Customers or customer groups of Interarch Building Products are not bound by long-term or ongoing contracts and are free to change or cancel their purchases, put off making payments, or stop making payments altogether. Regarding its order book, any cancellation, alteration, postponement, or payment default could significantly impair our cash flow situation, sales, and profits. Furthermore, Interarch Building Products depends on its customer base; for the Financial Years ended March 31, 2022, March 31, 2023, and March 31, 2024, repeat orders accounted for 586,422, and 81.39% of the company's revenue from operations.
6.Some of the orders placed with us by Interarch Building Products customers, have been cancelled in the past and any future cancellations may impact its revenue from operations, cash flows, financial conditions and cash flows.
7. The operation of Interarch Building Products depends on its production facilities and will continue to do so. The manufacturing process has some risks. Its business, operating results, financial situation, and cash flows could all be negatively impacted by any interruption, delay, or stoppage of its manufacturing operations.
8. Interarch Building Products outsource certain operations of our business such as security guard services and other manufacturing processes to third parties. Any failure by such third parties to deliver their services could have an adverse impact on its business, results of operations, financial condition and cash flows
9. Interarch Building Products financial results may be subject to seasonal variations and cyclical nature of the industry
10. Interarch Building Products depend on our PEB Contracts for a significant portion of its revenues, in connection with which it also provides onsite project management for installation and erection of pre-engineered steel buildings. Its inability to effectively supervise projects may lead to accidents or interruptions which may lead to project delays which may adversely affect its business, results of operations, financial condition and cash flow.
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