A leading investor Mukul Agrawal just invested in ArisInfra Solutions Ltd, buying around 13 lakh shares after the stock began to fall by nearly 45% from its high. New investors have started following Agrawal with interest in the Indian stock market as he now has more and more retail and institutional investors looking at this market for a long term.
And Agrawal acquired it after the stock went down sharply, so he was confident that the stock was going to grow even as share price has fallen. The investment is coming at a time when some of the best small-cap stocks have been in a correction in the market due to stock market risk.
ArisInfra Solutions is a technology-based construction materials procurement platform connecting infrastructure developers, real estate companies and suppliers through a digital marketplace. Cement, steel, ready-mix concrete, chemicals and other construction materials will be bought by the company using technology and supply chain efficiencies.
The stock had rallied after its market debut but was still under pressure as profit booking, the market turned down to be low on small-cap stocks and valuation were the reasons why. The stock has taken a dip of about 45% from its peak so value-driven investors looking for long-term value have an opportunity now.
Mukul Agrawal is known for identifying high-growth businesses at an early stage. Many companies that he invested in have achieved significant returns in the years since and his decisions were very much watched by the stock market. This company’s latest acquisition of ArisInfra Solutions has revived the interest of investors and raised the question at this point in time if the recent correction is a good place to invest.
Even though the share price has fallen, analysts say the long term outlook for infrastructure and construction-linked businesses is optimistic. India’s continued investment in highways, railways, urban development, housing projects, industrial infrastructure are likely to drive demand for construction materials in the coming years.
More technology to enhance procurement efficiency and logistics and provide integrated supply chain solutions is being implemented by ArisInfra Solutions. Digitalisation of the construction sector is driving an increase in the company’s position as a technology-enabled procurement platform.
Mukul Agrawal’s investment has lifted the market mood but analysts warn investors shouldn’t buy into the company’s financial performance, valuation, business model and execution. Small-cap stocks are more volatile than large-cap stocks so a thorough risk analysis is very necessary.
And investors will be closely monitoring ArisInfra Solutions’ quarterly earnings, order growth, customer growth, and profitability to see if the recent correction is another reason to buy shares. The endorsement by a veteran investor such as Mukul Agrawal has certainly brought the stock back into the spotlight.
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