“Venture debt firms like Innoven Capital, Strides Ventures and Trifecta Capital are looking to offload some of their stake in the upcoming round,” one of the people cited above said, adding that Alteria will also participate in the round, although they have already sold some of their stake.
The venture debt firms together hold about 1.5% stake in the company, according to the second person with knowledge of the matter.
“Kotak Mahindra Capital Co. Ltd, the investment banking arm of the Kotak Group, is running the mandate,” the person said, adding that they have reached out to several ultra high networth individuals (UHNIs) and high networth individuals (HNIs) to participate in the round.
Kotak, the venture debt firms and Infra.Market did not immediately respond to Mint’s request for comment.
The development comes after the construction materials marketplace Infra.Market secured over $120 million in a pre-IPO funding round in January, valuing it at about $2.7 billion.
The round saw participation from Tiger Global, Evolvence, and Foundamental alongside prominent investors such as Ashish Kacholia, Nikhil Kamath, and Abhijit Pai. It also counts Accel, Sistema Asia, Mars Unicorn Fund and Nexus Venture Partners among its backers. Some of these venture capital firms will likely offload part of their stakes under the offer for sale option.
Infra.Market, which plans to list later this year, has appointed Kotak Mahindra Capital, IIFL Capital, Goldman Sachs, Jefferies, ICICI Securities, HSBC Securities, Motilal Oswal Financial Services, and Nuvama Wealth Management to manage its IPO.
Startups tapping public markets
The company joins a growing list of startups preparing to tap public markets. Companies like Ather, Bluestone, and OfBusiness are expected to go public this year, following IPOs by FirstCry, Ola Electric, Swiggy, Unicommerce, and Blackbuck in 2024.
Founded in 2016 by Souvik Sengupta and Aaditya Sharda, Infra.Market started as an enterprise platform leveraging technology to streamline procurement in the construction ecosystem. The company has since expanded its portfolio, focusing on high-volume construction products under private labels while addressing issues like price transparency, quality control, and logistics inefficiencies.
In February, the company highlighted plans to move beyond concrete and steel, focusing on lifestyle categories like mattresses, curtains, and home décor. Its lifestyle brand, Ivas, which also includes other acquired brands like Shalimar Paints, Millenium, Emcer and Amstrad, offers materials that go “outside the wall” in home construction, like bath fittings, ceramics, tiles, paint, home appliances, consumer durables, etc.
Govt’s infra push
Infra.Market’s growth has accelerated as geopolitical shifts and inflationary pressures prompt companies to relocate manufacturing to India. This momentum has been bolstered by the Indian government’s infrastructure push and initiatives like the production-linked incentive scheme and the “China-plus one” strategy.
The company reported revenues of ₹14,530 crore in FY24, up from ₹11,846.5 crore the previous year, while its profit after tax surged to ₹378 crore from ₹155 crore in FY23. Much of this growth has been driven by the increasing contribution of private-label brands in categories like concrete, walling products, paint, electricals, and tiles, which form a significant share of its revenue.
Infra.Market also operates a robust manufacturing and distribution network, with over 260 manufacturing units nationwide, including 200 concrete plants, 16 tile factories in Morbi, and seven facilities dedicated to walling blocks. It has supplied materials to some of India’s largest infrastructure and industrial projects.
The company is also ramping up its business-to-consumer (B2C) and retail segments, which contribute 30% of total revenue. With over 10,000 retail touchpoints and 30 exclusive flagship stores, Infra.Market is targeting improved profitability in this segment, co-founder Sengupta had said in June.
Key takeaways
- Several venture debt firms (Innoven Capital, Strides Ventures, Trifecta Capital) are exploring a $30 million secondary transaction in Infra.Market’s extended pre-IPO round.
- Following a $120 million pre-IPO funding round in January that valued the company at $2.7 billion, Infra.Market is actively preparing for its IPO later this year.
- Infra.Market is strategically expanding into the B2C and retail segments, focusing on lifestyle categories like home décor, appliances, and bath fittings under its brand “Ivas” and acquired brands.
- The startup has benefited from macroeconomic trends and government initiatives.
- Infra.Market has demonstrated strong financial growth, with revenues increasing to ₹14,530 crore in FY24 from ₹11,846.5 crore in FY23, and a significant jump in profit after tax to ₹378 crore from ₹155 crore in the same period.