Infra.Market divests a portion of its stake in RDC Concrete to a group of investors led by Ashish Kacholia for $20 million, valuing the ready-mix concrete company at $225 million. The deal precedes Infra.Market's planned IPO.
Mumbai: In a significant development in the construction materials sector, Infra.Market, a business-to-business construction material platform backed by Tiger Global, has sold approximately 10% of its stake in RDC Concrete to investors led by renowned investor Ashish Kacholia. The transaction, valued at $20 million, places RDC Concrete's overall valuation at $225 million. This divestment by Infra.Market is strategically timed ahead of its anticipated Initial Public Offering (IPO) in the near future, as stated by the company.
Infra.Market had previously acquired RDC Concrete, a prominent ready-mix concrete manufacturer, for $90 million in 2021. Earlier this year, in June, the company was engaged in discussions with Varde Partners to potentially raise $150 million through the issuance of convertible instruments; however, that round is still pending closure.
Besides Accel Partners, Evolvence India, Sistema Asia Fund, Foundamental Gmbh, and Nexus Venture Partners are among the other investors in the company. In June 2022, Liquidity Group’s MARS Unicorn Fund invested $50 million in growth capital, valuing the company at $2.5 billion.
Founded in 2016 by Souvik Sengupta and Aaditya Sharda, Infra.Market leverages technology to streamline the procurement process for players in the construction ecosystem. The company focuses on providing branded, high-volume construction products, addressing critical challenges such as price transparency, quality assurance, vendor fragmentation, and logistical inefficiencies. Infra.Market operates across 20 states in India and has recently expanded its global presence with offices in Singapore and Dubai.
Souvik Sengupta commented on the investment, stating, "The investment in RDC reflects our commitment to driving growth and fostering leadership within the construction industry. We look forward to witnessing RDC's continued evolution and contributing to its promising journey in the sector as we welcome the new investors in the company."
According to the release, RDC Concrete possesses 100 plants across 48 cities and anticipates expanding its network to approximately 180 RMC plants by the close of FY25. The company projects a revenue of ₹2,000 crore by the end of the current fiscal year. Since its acquisition in 2021, RDC Concrete's revenue and EBITDA have reportedly grown more than twofold.
For the financial year ending in March, Infra.market reported consolidated revenues of ₹11,000 crore, with an EBITDA of ₹650 crore and a profit after tax of ₹300 crore, according to sources familiar with the matter. The company is yet to officially release its financial results.
It is also noted that India's concrete penetration is relatively low compared to other large economies globally. The company acknowledges the increasing shift from hand-mixed concrete to manufactured concrete in India, especially in non-metropolitan areas. The concrete manufacturing industry in India is still largely dominated by local players, with a lack of prominent national brands.
Ashish Kacholia stated, “Our interactions with the team at RDC has left us with a great understanding of the opportunities in India’s ready mix concrete market and the potential for the team at RDC to tap the opportunities.”
The overall expansion in the construction and infrastructure sector in India, along with the growth in metro, airport, and highway construction projects, provides significant growth prospects for construction material companies in India.
