Aluwind Architectural coming with IPO to raise Rs 29.70 crore

Aluwind Architectural

• Aluwind Architectural is coming out with an initial public offering (IPO) of 66,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 45 per equity share. 
• The issue will open for subscription on March 28, 2024 and will close on April 4, 2024.
• The shares will be listed on NSE Emerge Platform.
• The share is priced at 4.50 times higher to its face value of Rs 10. 
• Book running lead manager to the issue is Corpwis Advisors.
• Compliance Officer for the issue is Shripriya Mishra. 

Profile of the company

With an operating history spanning over years, the company commenced its business operations as a family venture. Today, the company operates in the segment of manufacturing and installing a diverse range of aluminum products. This includes windows, doors, curtain walls, cladding, and glazing systems, all meticulously crafted to meet the unique needs of architects, consultants, builders, institutions, and corporations. 

Operating from a cutting-edge 45,000-square-foot facility in Pune, Maharashtra, this tech-driven company specializes in a niche product segment. With infrastructure and advanced machinery, including a powder coating facility and CNC machines, it ensures precision in manufacturing aluminum products like windows, doors, and curtain walls. The facility is strategically organized with distinct sub-divisions for manufacturing, testing, and storage, ensuring an efficient production process. Specialized machines, such as a two-part pump for glazing, contribute to the company's unique offerings. Additionally, it maintains a display center and goods storage premise in Pune. Rigorous quality checks at multiple stages underscore the company's commitment to meeting the highest standards. On the backing of this infrastructure, the company has successfully expanded its market presence, with products sold in cities across India, including Mumbai, Pune, Bangalore, Hyderabad, among others, the company demonstrates a widespread reach and a commitment to serving customers across the nation. 

Since its establishment, the company has undertaken and successfully concluded numerous projects. Its diverse portfolio of products- tailored to architectural aluminium needs- encompasses an extensive array, catering to a wide spectrum of requirements. This includes but is not limited to aluminium profiles, glass facades, doors, windows, curtain walls, and structural glazing solutions. Its commitment to excellence and innovation allows it to deliver quality products that meet the unique demands of modern architecture and construction projects.

Proceed is being used for:

• Funding of working capital requirements of the Company.
• General Corporate Expenses.

Industry overview

The India facade market size reached $ 2,855.4 Million in 2023. Looking forward, IMARC Group expects the market to reach $ 5,431.9 Million by 2032, exhibiting a growth rate (CAGR) of 7.18% during 2024-2032. The increasing construction activities, rising number of commercial spaces, and the growing number of remodeling and upgradation projects represent some of the key factors driving the market. In recent years, the global facade market has experienced a notable surge in profitability, propelled by the increasing demand for alternative electricity sources in both commercial and residential constructions. This growth can be attributed to advancements in technology, particularly the emergence of energy-efficient façade materials. Consequently, promising opportunities lie ahead for the market, buoyed by the robust pace of construction activities worldwide. Facades seamlessly blend aesthetic appeal with superior performance in a unique manner unmatched by other construction systems. This characteristic is expected to significantly drive product demand in the forthcoming years. A key factor anticipated to propel the facade industry is the imperative to curtail heating and air conditioning expenses, striving for energy efficiency. This cost-cutting trend is projected to foster sustainable product development over the forecast period.

The surge in popularity of green buildings necessitates high-transparency glass, facilitating light penetration while maintaining heat resistance. The forecast period is expected to witness an uptick in the application of high-performance facades focused on energy conservation and solar control, delivering substantial economic and ecological benefits. This shift has spurred demand for triple-glazed facades, boasting a lower U-value compared to their double-glazed counterparts. Presently, the industry is dominated by classic designs exuding a rigid and elegant appearance. However, modern facades utilizing advanced lightweight materials are anticipated to exhibit significant growth in the years ahead. Benefits such as resilience against adverse weather conditions and detection of unwanted intrusions are among the primary reasons for the remarkable growth of modern facades during the forecast period. The Indian fenestration industry is evolving gradually, driven by a changing and more experimental generation of end-users seeking revolutionary, non-traditional materials, new designs, colors, and energy-efficient elements for their homes and offices. Traditional materials like timber are being swiftly replaced by engineered products and thermoplastics like PVC resin, with uPVC gaining traction in the Indian market. Architects and interior designers recognize the potential of these materials in reducing air conditioning costs, driving a discernible yet steady market expansion.

Pros and strengths

Fostering Longstanding Client Relationships and Builder's Fraternity Connectivity: Since the company’s incorporation, it has been actively involved in a multitude of projects spanning Residential, Commercial, and Institutional building segments, develop by various builders/developers. Its strong client relationships are of utmost importance to it. Its motivated team, combined with efficient work processes, synergize to deliver exceptional client satisfaction. Its commitment to quality work and timely project execution has significantly contributed to strengthening existing client bonds and winning new projects. Many of its clients have entrusted it with repeat orders, a testament to its performance. Having a clientele that includes some of India’s leading real estate developers groups like L&T, Birla, etc, allows it to competitively bid for and secure a diverse range of projects. Additionally, the company boasts strong connectivity within the builder’s fraternity, further empowering its ability to secure projects and maintain fruitful collaborations. Its consistent emphasis on client satisfaction has been pivotal in its ability to successfully bid for and secure new projects. 

Experienced Leadership Backed by a Skilled Professional Team: The company’s sustained business growth can be attributed to the extensive industry knowledge and expertise of its senior management, who collectively possess hands-on experience of more than two decades. Their experience has played a pivotal role in shaping and executing its business strategies and operational processes. By leveraging the market acumen of its promoters and senior management, it adeptly identifies market opportunities and tailor products and services to cater to specific customer segments. This collective wealth of market experience has significantly contributed to its business’s growth trajectory and sustained profitability.

Widening Horizons: The company, a pioneer in fabricating and installing aluminium windows, doors, Curtain Walls, Cladding & Glazing Systems, boasts an extensive market reach. Catering to Architects, Consultants, Builders, Institutions & Corporates, it transcends geographical boundaries to deliver superior aluminium solutions. 

Risks and concerns

Business requires services of third parties: The company’s business generally requires the services of third parties, including sub contractors and suppliers of labour and materials. The timing and quality of products it installs depends on the availability and skill of those third parties, as well as contingencies affecting them, including labour and material shortages and industrial action, such as strikes and lockouts. It cannot assure that skilled third parties will continue to be available at reasonable rates and in the areas in which it needs to execute its projects. As a result, it may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of contracted services, and any delay in project execution could adversely affect its profitability.

Geographical constrain: The company’s revenue from its customers situated in Maharashtra contributed significant portion of its total revenue from operations. Such geographical concentration of its business in these regions heightens its exposure to adverse developments related to competition, as well as economic and demographic changes in these regions which may adversely affect its business prospects, financial conditions and results of operations. It may not be able to leverage its experience in Maharashtra region to expand its operations in other parts of India and overseas markets, should it decide to further expand its operations. Factors such as competition, culture, regulatory regimes, business practices and customs, industry needs, transportation, in other markets where it may expand its operations may differ from those in such regions, and its experience in these regions may not be applicable to other markets. 

Seasonal business: The company’s business and operations are affected by seasonal factors. In particular, the monsoon season in the second quarter of each Fiscal may restrict its ability to carry on activities related to its projects and fully utilize its resources. During periods of curtailed activity due to adverse weather conditions, it may continue to incur operating expenses and its project related activities may be delayed or reduced. Adverse seasonal developments may also require the evacuation of personnel, suspension or curtailment of operations, resulting in damage to project sites or delays in the delivery of materials. Such fluctuations may adversely affect its liquidity, business, financial condition, results of operations and prospects. As a result, its revenues and profits may vary significantly during different financial periods and certain periods are not indicative of its financial position for the year.

Outlook

Aluwind Architectural is an established firm of the nation involved in manufacturing of Aluminum Windows and Glass Facade. The company specializes in the installation of aluminum windows-doors, Curtain Walls, Cladding and Glazing System to cater Architects, Consultants, Builders, Institutions and Corporate. The company is having 45000 sq.ft infrastructure at Pune, Maharashtra. It is well equipped with updated in- house Powder Coating Facility and Machines line Pneumatic Double head cutting machine, Single head cutting machine, Milling Machine, END milling machine, Punching Systems for Fabrication and Assembly, also two part pump for Glazing and vertical saw panel machine for ACP Fabrication, Conveyor System for Material Handling, that are managed for the manufacturing of products. Furthermore, it is divided into various sub-divisions such as manufacturing unit, testing unit and storage unit. The products manufactured are checked at various levels before being sent for final dispatch. On the concern side, the company’s industry being labour intensive is highly dependent on labour force for carrying out its business operations. Shortage of skilled/unskilled personnel or work stoppages caused by disagreements with employees could have an adverse effect on its business and results of operations.

The company is coming out with an IPO of 66,00,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 45 per equity share to mobilize Rs 29.70 crore. On performance front, the company’s total Revenue increased by 67.54% to Rs 4,900.62 lakh for Fiscal 2023 from Rs 2,925.13 lakh for Fiscal 2022. The company’s profit after tax increased substantially by 242.72% to Rs 270.05 lakh for Fiscal 2023 from Rs 78.80 lakh for Fiscal 2022. Meanwhile, the company’s business strategy emphasizes organic growth through continual innovation and improvement. By investing in research, development, and honing its in-house capabilities, it aims to organically expand its product offerings, customer base, and market reach. This approach enables it to adapt to changing market dynamics and sustain a steady, controlled growth trajectory.