Arisinfra Solutions Ltd Management Discussions

Overview of the Industry

Indian Infrastructure and Construction Sector

Indias infrastructure, construction and real estate sectors drive economic transformation, connecting regions and reshaping cities through road, rail, airports and urban renewal. Initiatives such as Smart Cities and industrial corridors are enhancing connectivity and resilience, while real estate responds with a range of spaces, including housing, commercial and mixed-use developments, particularly in emerging growth corridors.

Union Budget 2024–25

The Budget reinforces infrastructure-led growth with 11.11 lakh crore capital outlay (3.4% of GDP), continuing elevated public investment for the fourth year. States will receive 1.5 lakh crore 50-year loans to strengthen local infrastructure. Fiscal deficit is targeted at 5.1% of GDP with buoyant tax revenues supporting consolidation.

Parameter	Target
Capital Expenditure	11.11 lakh crore
Fiscal Deficit	5.1%
Total Receipts	30.8 lakh crore
Total Expenditure	47.66 lakh crore
Net Tax Revenue	26.02 lakh crore

Sectoral Priorities

Flagship programmes—PM Gati Shakti, Bharatmala, Sagarmala, National Rail Plan—focus on multimodal logistics and digital integration. PLI schemes back electronics, green energy, defence and building materials. Affordable housing under PMAY, metro expansion and urban transit remain key urban priorities.

Monetary and Financial Conditions

RBI balanced inflation and growth, lowering repo rate to 6.25% in Feb 2025 as inflation averaged 4.5%. Infrastructure credit grew 18.7% YoY, supported by NBFCs, InvITs and blended finance. GDP growth for FY26 is projected at 6.2 6.7%.

Sector Performance & Outlook

Construction GVA grew 8.6% in FY25 despite election and monsoon disruptions. The sector is set to become the worlds third largest by 2025 at 25.31 lakh crore, reaching 39.10 lakh crore by 2029 (CAGR ~8.8%). Urbanisation (50% by 2047), industrial corridors and digital adoption (BIM, AI, ESG tools) drive growth. Challenges remain in clearances, supply chains and skilled manpower.

Indicator	Value
Market Size 2025	25.31 lakh crore
Market Size 2029	39.10 lakh crore
Urban Share 2047	~50%
Road Construction 2024	29 km/day
National Highways	~1.46 lakh km
Renewable Capacity	209+ GW
Construction Jobs	~7 crore

National Infrastructure Pipeline (NIP) – May 2025

13,100+ projects worth 165 lakh crore. Major allocations:

Roads & Highways (27.7%), Railways (12.7%), Power (12.7%), Real Estate (10.9%), Irrigation (7.7%), Urban Transit (4.9%).

Material & SCM Challenges

Projects face cost overruns due to fragmented supply chains, weak procurement and poor contractor coordination. With materials forming 50–60% of project cost, delays and wastage are leading causes of time and budget overruns.

Indian Real Estate Sector

Post-COVID demand has revived across offices, retail, warehousing, hospitality and industrial spaces. The sector is projected to grow at 13.8% CAGR by 2027 (India Investment Grid), aided by FDI policies, RERA and REITs.

• RERA ensures buyer protection, transparency and uniform governance across states.

• REITs, introduced in 2019, now serve 2.5 lakh+ unitholders with 1.5 lakh crore AUM, offering liquidity, diversification and professional management.

• SEZ investments reached 7.07 lakh crore (March

2024), boosting exports and industrial growth.

Private real estate – urbanisation-led demand

Urban migration and shrinking household sizes are reshaping residential demand. Average household size fell from 4.3–4.4 (2019) to 4.1–4.2 (2024), adding 29+ million households, with another 26 million expected by 2029.

• Indias urbanisation (36% in 2023) lags the global average (57%). By 2030, urban India is expected to contribute 70% of GDP.

• The 15th Finance Commission earmarked 8,000 crore for new city incubation and 450 crore for shared municipal services.

• Under PMAY (Urban), 91.5 lakh houses have been built with 1.59 lakh crore expenditure (March 2025).

Household trends (mn households)

Category	2019	Share %	2024	Share %	2029P	Share %
High Income ( 1.1m+)	28	9%	41	12%	64	17%
Upper Middle ( 0.8 1.1m)	50	16%	68	20%	96	26%
Lower Middle ( 0.3 0.8m)	94	30%	106	31%	118	32%
Low Income (< 0.3m)	140	45%	127	37%	93	25%

Outlook – sustained growth trajectory

Policy reforms (RERA, REITs), government investment, demographic shifts and rising incomes will sustain demand. Commercial real estate will benefit from services growth and outsourcing, while residential demand will be driven by urbanisation and infrastructure expansion. The focus ahead is on affordable housing, sustainable city planning and green buildings.

Material & SCM challenges

According to Grant Thornton (FY25 26), sustained demand is offset by rising costs of steel, cement and finishing materials, squeezing margins—especially in affordable housing. ESG-driven designs add further upfront costs.

• Developers are diversifying sourcing, securing long-term supply contracts and adopting hedging to manage volatility.

Challenges remain: fragmented supply chains, import dependence in some categories and irregular lead times.

• Effective procurement and material cost control are now critical to project viability and profitability.

Material Management & Supply Chain Challenges in Real Estate

As per the India Real Estate Report FY 2025 26 by Grant

Thornton Bharat, the sector is navigating a period of sustained demand alongside pronounced cost pressures from construction materials. Rising prices of core inputs such as steel, cement and other building finishes, coupled with supply chain disruptions, have placed considerable strain on project budgets. These cost escalations are squeezing developer margins, particularly for smaller players and projects in the affordable housing segment, where price sensitivity is highest. In addition, the growing adoption of ESG-compliant designs and green certifications—while beneficial in the long term—has increased upfront material costs due to the use of energy-efficient, sustainable products that often carry a premium. The report notes that managing material procurement has become a critical determinant of project viability. Developers are increasingly diversifying sourcing channels to mitigate regional price spikes and logistical delays, while also seeking to lock in supply contracts to hedge against volatility. However, fragmented supply chains, dependence on imported components in specific categories and inconsistent lead times continue to create execution risks. These factors, when combined with broader macroeconomic challenges and regulatory delays, make construction material budgeting and cost control an essential strategic priority for sustaining profitability and delivery timelines in FY 2025 26 and beyond.

Construction Materials

Construction Materials and Supply Chains

In the global real estate and infrastructure landscape, construction materials are far more than an input — they are the foundation on which every project stands. Across markets, materials typically account for 50% to 70% of total construction costs and in certain large-scale or low-labour-cost projects, this share can rise to over 75%. Whether its steel and cement for structural strength, paints and coatings for protection and aesthetics, or specialised fittings and finishes, the financial and operational weight of materials in a projects lifecycle is undeniable.

For developers and contractors, materials purchasing decisions directly influence cost efficiency, project timelines and quality outcomes. Given that over half of the project budget is tied to materials, even a small fluctuation in pricing or delivery schedules can significantly impact profitability and delivery commitments. Effective procurement involves:

Price foresight: Tracking commodity market movements for inputs like steel, cement and aluminium to secure contracts before cost surges.

Quality control: Ensuring suppliers meet project-specific grade and durability standards to avoid downstream defects.

Inventory balance: Avoiding both overstocking, which ties up working capital and understocking, which risks costly delays. Well-managed material procurement not only shields projects from price volatility but also creates competitive advantages through consistency, quality assurance and predictable delivery schedules.

Supply chain as a competitive differentiator

The post-COVID world has exposed how fragile global supply networks can be. For construction companies, aligning with suppliers who have resilient, diversified supply chains can be the difference between meeting deadlines and stalling progress. This means investing in:

Supplier diversification to avoid over-reliance on a single source or geography.

Digitally integrated supply chains that provide real-time visibility into inventory, shipping timelines and bottlenecks. Collaborative planning with suppliers to align production schedules with project milestones.

The opportunity for construction materials

For cement, steel, paint and other materials, the expanding demand for infrastructure projects, real estate — both commercial and residential — represents a sustained growth opportunity. As urbanisation accelerates, demand for infrastructure and housing will keep material orders steady, if not rising. However, in a competitive market, winning supplier status with major construction players depends on more than just price. Leading suppliers differentiate by:

Ensuring consistent product quality that meets varying project specifications.

Offering flexible logistics solutions, such as just-in-time delivery, to reduce site-level storage costs.

Building strategic partnerships with contractors and developers for multi-project supply agreements.

With global urbanisation trends, increasing infrastructure investments and a strong pipeline of commercial and residential projects, the ability to buy, manage and deliver construction materials efficiently will determine margins, timelines and reputations. For construction companies, its a lever for cost control and reliability. For material suppliers, its the pathway to sustained market relevance and profitability.

In an industry where delays cost millions and reputation is built on delivery, mastering material procurement and supply chain management is no longer an operational detail — it is a strategic imperative.

About the Company and Its Operations

About The Company

Arisinfra is a full-stack B2B digital network transforming the way construction materials are procured and distributed in India. Founded with a clear vision to bring efficiency, transparency and scale to the highly fragmented and unorganised construction materials sector, Arisinfra digitises and streamlines the procurement process across the value chain. The network empowers buyers—including contractors, developers and manufacturers—with access to a verified supplier network, quality products, credit facilities, logistics and real-time pricing, while simultaneously unlocking access to a larger, more organised market for suppliers

Revenue Streams

Arisinfra operates across three key revenue streams: Materials,

Contract Manufacturing and Services. These segments are interlinked, creating operational synergies where performance in one area supports and strengthens the others. This integrated model contributes to scale efficiency, margin stability and customer continuity.

Core Materials

Large-scale infrastructure and construction projects depend on a steady and reliable supply of core materials. These constitute the foundation of execution and represent the first stage in converting plans into operational projects. In the Indian context, material supply is also one of the most vulnerable links in project execution, with risks associated with availability, quality and timeliness.

Key operational challenges

• Sourcing at scale: A fragmented vendor base makes consistency across geographies difficult.

• Quality assurance: Variations in grade, mix, or finish can impact structural soundness and delay regulatory approvals.

• Delivery timelines: Even short disruptions in supply can stall site activity, leading to idle labour and equipment.

To mitigate these risks, Arisinfra has built a structured materials portfolio designed to meet institutional procurement needs. This portfolio spans three categories, each governed by distinct operational dynamics.

Heavy, time-sensitive, locally manufactured materials

Products such as aggregates, ready-mix concrete (RMC) and concrete blocks fall into this category. Logistical constraints characterise these: aggregates and blocks are not cost-efficient to move across long distances, while RMC has a limited shelf life measured in hours. Any breakdown in coordination or scheduling in this segment can bring project execution to a standstill.

Third Party manufacturing site in Chennai

High-volume structural core

Steel and cement represent the largest cost elements in most construction projects. Procurement in this category requires balancing exposure to market price fluctuations with the non-negotiable requirement of quality uniformity. The ability to secure supply at competitive rates while maintaining consistent specifications remains a critical operating factor.

Specialised and finishing-stage materials

Flooring, tiles, electrical systems, plumbing and sanitaryware are procured in the final stages of a project. These materials are diverse in product count, often supplied in multiple tranches and require synchronised delivery to avoid site congestion, storage inefficiencies, or handover delays.

Operational approach and control

Supply is the backbone of Arisinfra. We have delivered over

15 million tonnes of construction materials, supported by

3.5 million tonnes of reserved annual capacity across 9 manufacturing plants. We operated at over 650+ average daily truckloads, demonstrating the scale, reliability and control we bring to Indias largest developers and projects. This foundation is strengthened by a verified national vendor network, reserved capacities in core categories, centralised procurement and technology-enabled order and quality tracking — reducing friction, improving scheduling and enhancing cost control.

Revenue mix by category – FY25

Vendor and quality indicators – FY25

Category / Indicator	Status
RMC Revenue	1,848.8 Mn
RMC quality rejections	0.1%

Reserved manufacturing

As the Materials business scaled, the Company identified an opportunity to strengthen supply assurance and cost efficiency beyond the conventional vendor network. This led to the creation of Reserved Contract Manufacturing (RCM), an arrangement that ensures certainty of supply and pricing in critical categories.

What began as a measure to secure high-demand categories has now evolved into a core growth driver, contributing an estimated 33-35% of total revenues and increasing steadily.

delivers the dual advantages of guaranteed supply and volume-linked cost efficiencies, while remaining capital-light and asset-free.

Strategic advantages

• Beyond manufacturers limitations – Unlike traditional manufacturers, whose operations are bound by plant locations, fixed capacities and category specialisation, the Company operates across geographies and categories, reallocating capacities to maximise returns.

• Superior to traders – Conventional traders depend on spot market availability and pricing. The RCM model secures capacity and costs well in advance, ensuring supply certainty even in tight markets.

• Supply security at scale – In large infrastructure and real estate projects, stoppages can cause a significant financial impact. Reserved capacities minimise the risk of supply disruptions.

• Volume discounts without capital expenditure – The Company attains manufacturer-level pricing advantages without tying up capital in physical assets, maintaining operational agility.

• Operational efficiency – Manufacturing partners operate the plants, while the Company oversees quality, capacity planning and delivery assurance, allowing management to focus on growth.

• Flexibility of allocation – Reserved capacity in one state or category can be seamlessly reallocated to other projects or product categories, ensuring fungibility and scale responsiveness.

Distinctive positioning

This model represents neither traditional trading nor conventional manufacturing. Instead, it reflects a network led supply approach that combines the reliability of a manufacturer with the agility of a technology-enabled aggregator. By doing so, the Company ensures that material supply is never a bottleneck for customers, creating a sustainable competitive advantage.

Key metrics (FY25)

Plants reserved: 5 RMC plants and 4 aggregate plants

Estimated assured throughput: RMC ~1.5 million MTA;

Aggregates – ~2 million MTA

Revenue share from reserved capacity: ~33% of total revenues

Growth indicators: Consistent YoY increase in revenues from Third Party Manufacturing (TPM)

Geographical allocation: State-wise contribution

Maharashtra 54%, Tamil Nadu 29%, Karnataka 11%

The Execution Context

Large-scale developments, particularly in real estate, often face disruption due to:

• Capital constraints that slow down specific phases without justifying a full external fundraise.

• Fragmented procurement from multiple vendors, creating variability in pricing, quality and timelines.

• Limited coordinated oversight, leading to delays, cost overruns and missed delivery schedules.

The three-component framework

1. Money — Strategic Capital Support

Arisinfra provides structured funding solutions that operate below the level of a formal external raise. These interventions bridge execution gaps, enable timely progress in critical phases and facilitate faster time-to-market.

2. Materials — Exclusive Supply Partnership

Acting as the exclusive supply partner, Arisinfra integrates its materials portfolio — spanning aggregates, RMC and finishing-stage items — into the project execution plan. This ensures assured supply, cost competitiveness and uniform quality across the build cycle.

Management — End-to-End Project Services

Execution support is delivered through coordinated project services, including:

• Design coordination to align plans with delivery schedules.

• Procurement management leveraging Arisinfras portfolio and vendor network.

• Specialist deployment of technical teams across phases.

• Delivery oversight to monitor sequencing and timelines.

• Sales enablement equips sales teams with real-time project insights, tools and content to build buyer confidence and accelerate deal closures.

• CRM in real estate project management centralizes client interactions, ensuring personalized engagement, timely updates and stronger buyer trust throughout the project lifecycle.

These services are typically embedded within 18–30 month project cycles, allowing optimisation of costs, compression of and faster delivery of market-ready inventory.

Strategic advantages

• High client retention through deeper integration into project execution cycles.

• Cross-selling potential as services drive incremental demand across the materials portfolio.

• Margin accretion with services contributing higher profitability compared to standalone supply.

• Risk mitigation by reducing execution delays, cost overruns and quality lapses.

• Scalability through leveraging the existing technology network and vendor ecosystem with limited incremental cost.

Strategic relevance for Arisinfra

By combining capital support, assured supply and coordinated management, the Services vertical strengthens Arisinfras role from being a supplier to becoming a strategic enabler for developers. This reduces execution friction, enhances delivery certainty and supports long-term client partnerships, while expanding margins and reinforcing the companys competitive position.

Customer Growth and Market Reach

During the last three years, Arisinfra has seen a significant transformation in its customer base. The Company has moved from a smaller, concentrated set of accounts to a broader and more diversified portfolio that includes several of Indias leading names in construction and infrastructure.

The expansion has not been limited to an increase in customer numbers but has also involved a higher share of large, institutional accounts. The Company has enhanced its presence among major contractors, real estate developers, reputed manufacturers and institutional buyers whose scale and execution standards align with Arisinfras business model. Given the nature of operations, where credit is extended and project execution cycles are closely integrated, the quality of customer profile remains as important as the volumes served. Each new relationship is evaluated on credibility, scale of opportunity and long-term strategic fit. This approach has resulted in a geographically diverse, sectorally balanced and strategically positioned customer portfolio with strong potential for sustained growth.

Scale and breadth

The Companys current network reflects both depth of relationship and breadth of reach:

• Lifetime customers: More than 2,700 across Materials and Services pillars (net additions in FY25: 646).

• Vendors and partners: Over 1,800 verified vendors and manufacturing partners integrated into the supply chain.

• Geographic reach: Deliveries to over 1,000 PIN codes, covering every major construction hub in India.

• Logistics scale: Average of 665 truck dispatches per day, coordinated through proprietary technology platforms for precision and reliability.

• Material deliveries: Over 15 million metric tonnes of materials delivered to date, with consistent on-time performance for critical project supplies.

• Repeat customer rate: Approximately 80%.

• Revenue concentration: 67% of revenues contributed by the top 50 customers.

• Top 50 customers with cross sell: 27 customers are buying more than 2 categories from us

• Top 50 customers with Services cross sell: 7 of the top customers avail Services from us

Diversification by design

The Company maintains a balanced and diversified portfolio to mitigate risks associated with over-concentration in any single category, region or project type. The key customer segments are:

• Real estate developers – Engagements with leading national and regional developers across residential, commercial and mixed-use projects.

• Large contractors – Participation in major infrastructure projects, including highways, metros, airports and industrial corridors.

• Manufacturers and institutions – Supplies and services to manufacturing plants, logistics hubs and large industrial developments.

This diversification enables the Company to sustain momentum across business cycles and allocate resources to sectors demonstrating stronger demand.

Depth of relationship

An increase in customer value accompanies growth in customer count. Key aspects include:

• A majority of the top 50 customers have maintained relationships for more than two years, with annual wallet share showing consistent improvement.

• Cross-category expansion is observed, with many accounts that begin in one material category subsequently extending into two or more categories.

• Services-led engagements and contract manufacturing provide the basis for multi-phase, multi-year partnerships, strengthening engagement and expanding share of spend.

Key metrics:

Customers buying two or more categories: 55%

Repeat revenue (YoY): 80%

Services-attached accounts within top 50: 7

Strategic Value of the Network

The Companys network, comprising large institutional customers supported by a verified vendor base, functions as more than a measure of scale. It represents a competitive advantage that enables the Company to:

• Aggregate volumes to secure cost advantages over single-category competitors.

• Reallocate supply capacity to regions where demand is strongest, covering over 900 PIN codes.

• Utilize established customer relationships to facilitate entry into new categories or geographies.

Key metrics:

• Deliveries across 1,000+ PIN codes

• Customers buying in multiple categories contribute 55% of Revenue

From Quality to Scale

The customer and vendor base, initially concentrated and relatively small, has evolved into a nationwide, high-quality network. This network supports sustained business momentum. Through selective onboarding, diversification across categories and geographical expansion, the Company has developed a portfolio that ensures both near-term volumes and long-term value.

Major Wins – At a Glance

Chennai – 2.7 Lakh Sq. Ft. Residential Turnaround

The Company successfully delivered a previously stalled Investcorp project through its integrated execution model via ArisUnitern, completing the project ahead of schedule and unlocking significant developer value.

Contract Manufacturing Tie-Up – RMC & Aggregates

High-capacity production lines were reserved across 5 RMC plants and 4 aggregates plants, ensuring predictable supply at stable returns for multi-year projects.

Large Institutional Supply Contract – Multi-Category

A multi-year agreement was secured with a top-tier developer, covering aggregates, RMC, steel, cement and finishing materials, thereby maximising wallet share and enhancing cross-selling opportunities.

Urban Metro Infrastructure Supply

Critical aggregates and RMC were supplied for an ongoing metro corridor, effectively managing more than 100 daily dispatches with zero disruption.

Expansion into Tiles, CP Fittings and Electricals

The Company established supply relationships with leading manufacturers in these categories and immediately leveraged its institutional customer base to drive scale-up.

Customer & Vendor Network

The scale, integration and reliability of the customer and vendor network are integral to Arisinfras execution model. Built over years of disciplined engagement, this network provides reach, resilience and the capacity to grow volumes without compromising returns.

Customers

Arisinfra serves a broad and diversified base of over 2,700 institutional customers across the construction ecosystem, including:

• Large Contractors – Handling complex, multi-phase infrastructure and real estate projects.

• Real Estate Developers – Ranging from leading institutional names to established regional players.

• Manufacturers & Industrial Clients – Requiring high-volume, high-quality materials for plants, warehouses and logistics hubs.

• Others – Comprising distributors and small contractors.

Customer relationships are characterised by:

• Diversification – No single customer accounts for a disproportionate share of revenue.

• Selection Discipline – Engagement with customers having established track records and stable cash flows.

• Long-Term Value – Institutional customers provide multi-project, multi-year engagements with higher lifecycle potential.

• Wallet Share Growth – The breadth of categories supports deepening of relationships at minimal incremental acquisition cost.

Key metrics:

Active enterprise customers: 1200+

Share of top 10 customers: 49%

Vendors

The ability to deliver at scale is supported by a trusted network of over 1,800 active suppliers and manufacturers.

• Core Categories – Aggregates, RMC, walling solutions, steel and cement through long-term partnerships.

• Finishing Categories – Tiles, sanitaryware, electrical and plumbing through tie-ups with leading brands.

• Reserved Capacities – Control over 5 RMC plants and 4 aggregate plants through strategic agreements, ensuring predictable supply at stable returns.

Vendor partnerships provide:

• Volume Assurance – Secured capacity in high-demand categories.

• Quality Control – Oversight of production processes to ensure consistency across regions.

• Procurement Advantage – Scale-driven pricing efficiencies shared across projects.

• Reliability – Multi-vendor network mitigates disruption risk.

Key metrics:

Active vendors: 740+

Top 10 vendor concentration: 45%

Network Scale & Leverage

• Geographic Reach – Coverage across 1,000+ PIN codes, with emphasis on deepening presence in high-opportunity regions.

• Cross-Leverage – Rapid scaling of new categories through the existing customer-vendor base.

• Technology Integration – Proprietary systems connect both sides of the network, streamlining orders, documentation, credit management and delivery tracking.

Key metric:

Tech-integrated vendors (e-docs, e-invoices): 100%