Inside Acetech E-Commerce IPO: Numbers Beyond the Narrative

In 2014, Acetech E-Commerce Limited was first founded as an LLP. Later, in 2024, it transformed into a public limited company. The business deals in building and construction supplies on a B2B basis. The company has chosen a procurement-focused business model with fewer assets. Acetech works with institutional buyers, retailers, and contractors. The business concentrates on working capital management rather than manufacturing and makes money through high-volume distribution. The company is offering up to 43.70 lakh shares for sale on the NSE Emerge.

The Opportunity and The Risks

Distribution of B2B Building Materials: A Fragmented Market with Essential Working Capital Discipline  

Building and construction materials are sold and distributed among businesses via Acetech E-Commerce. This sector is associated with the infrastructure outlays of India, the growth of the real estate sector, and the small and medium-scale contractor ecosystem. The principal drivers of the Indian construction sector, which is a $600 billion+ industry, include urbanisation, housing requirements, commercial real estate, and government outlays on roads, metro rail, logistics parks, and industrial corridors.  

The distribution of building materials is very fragmented, mostly based on relationship sourcing and local suppliers. The scope for middlemen who can aggregate demand and optimise procurement has been created through digital buying, the GST formalisation process, and better logistics.

Nonetheless, the sector has structural characteristics:  

• Minimal entry barriers 

• Sensitivity to margins  

• High working capital  

• Dependent on credit  

Traditional trading companies typically have EBITDA margins between 5% and 10%. Because of models that mainly rely on receivables, working capital cycles frequently last between 120 and 180 days. Scale, supplier relationships, pricing discipline, and prudent credit management are all necessary for success.

Business Model  

Acetech E-Commerce: Asset-Light Distribution, Working Capital Intensive  

Building materials are traded and distributed by Acetech E-Commerce to contractors, retailers, and institutional buyers. Instead of producing goods, the company makes money from procurement spreads and resale variations across sourced inventory.  

With operating revenue of ₹70.28 Cr and stock-in-trade purchases of ₹42.83 Cr for FY25, there was a healthy gross trading spread. Revenue reached ₹40.43 Cr in the first half of FY25 (ending September 2025), indicating continued growth.  

The model is:  

Procurement-driven: The largest share of the operating expenses is driven by the acquisition of the stock-in-trade, which is the key cost driver.  

Volume-driven: In FY25, the revenue has grown from ₹52.38 Cr in FY23 to ₹70.28 Cr.  

Asset-light: At September 2025, the net property, plant, and equipment (PPE) was valued at a mere ₹6.60 lakhs, which is an indication of low capital expenditure intensity.  

Working capital-intensive: As of September 2025, the trade receivables and inventories stood at ₹18.86 Cr and ₹8.48 Cr, respectively, which is substantially higher than the fixed assets.  

The working capital requirements have resulted in a negative operating cash flow of ₹(2.81 Cr) in the first half of FY25, as evident from the cash flow statement. This explains why the largest share of the IPO funds is used for working capital financing, which is required to maintain and enhance the trade volumes without relying much on short-term borrowings.

Financial Snapshot (September 2025)

• Revenue from Operations: ₹40.43 Cr  

• Total Income: ₹40.43 Cr  

• EBITDA (Operating Profit before WC): ₹8.02 Cr  

• PAT: ₹5.74 Cr  

• EBITDA Margin: 19.8%  

• PAT Margin: 14.2%  

• Basic EPS (6M): ₹4.99  

Margins are quite robust for a company that is largely trading-driven. Nevertheless, sustainability is largely dependent on working

Balance Sheet Structure (As on 30 Sept 2025)

• Inventory: ₹8.48 Cr  

• Trade Receivables: ₹18.86 Cr  

• Trade Payables: ₹1.79 Cr  

• Short-Term Borrowings: ₹0.16 Cr  

• Long-Term Borrowings: ₹0.26 Cr  

• Total Borrowings: ₹0.43 Cr  

• Net Worth: ₹22.12 Cr  

The company is lean on fixed assets, with PPE of only ₹0.07 Cr. But the capital is heavily invested in receivables and inventory.

Working Capital Position (30 Sept 2025)

• Using 6M FY25 run-rate:

• Inventory Days: 38 days  

• Receivable Days: 85 days  

• Payable Days: 16 days  

• Net Cash Conversion Cycle: 107 days  

Though an improvement over the full-year numbers, the company is still heavily invested in receivables. Funding support will be required for growth.

Revenue Streams & Business Mix (6M FY25)

Acetech primarily acts as a trading intermediary.

Core Trading Revenue 

Purchase of Stock-in-Trade: ₹25.33 Cr  

Gross Spread: ₹15.10 Cr  

Gross Margin: 37%  

This spread covers logistics, employee costs, finance costs, and overheads.

Procurement-Led Model

Procurement accounts for 63% of revenue.

Employee Expense: ₹0.75 Cr (1.8% of revenue)  

Finance Cost: ₹0.04 Cr (0.1% of revenue)  

Other Expenses: ₹8.52 Cr (21%)  

This indicates:

• Low fixed cost base  

• High operating leverage  

• High sensitivity to trading margins 

IPO Structure & Growth Funding, Acetech E-Commerce

Acetech is making a 100% Fresh Issue of 43,70,400 equity shares.

There is no Offer for Sale (OFS), which means the entire amount goes to the company.

Primary Use of IPO Proceeds

The IPO proceeds (₹48-49 Cr) are primarily allocated for:

Working Capital Requirements: The company is heavily dependent on receivables and inventory. 

The growing revenue base also requires additional working capital funding.

Post-IPO (approx.): Net Worth may rise to ₹70 Cr+ (subject to final expenses)

• Debt/Equity ratio improves significantly.

• Liquidity Cushion becomes stronger.

• This significantly mitigates balance sheet risks and enables the company to:

• Increase purchase orders

• Negotiate better supplier credit terms

• Reduce dependence on short-term borrowings

• Manage receivable growth. 

The IPO will transform the company from a leveraged growth business to an equity-funded scale-up platform.

Promoters

The management of Acetech E-Commerce Limited is headed by Mr. Bippinkumar Vijay Saraogi, Ms. Sweta Bippinkumar Saraogi, and Ms. Madhavi Govindprasad Sharma.The Promoters have been associated with the company since it was an LLP in 2014, before it turned into a public limited company in 2024. During their tenure, the company’s revenue has grown from ₹52.38 Cr in FY23 to ₹70.28 Cr in FY25. The promoters will hold majority control post IPO as well, with their minimum investment locked in for three years as per SME regulations.

Mr. Bippinkumar Vijay Saraogi, who has completed higher secondary education, oversees strategy, purchasing, and business expansion. Ms. Sweta Bippinkumar Saraogi, who also completed higher secondary education, handles administrative and strategic work. Ms. Madhavi Govindprasad Sharma, who is a graduate, handles support for operations and administration.

The promoter group’s strength lies in implementation and vendor connections, not in technical expertise. To maintain growth, they will have to maintain trading margins and optimise working capital.

The promoters’ strength is in implementation and vendor connections, not in technical expertise. To maintain growth, they will have to maintain trading margins and optimise working capital.

Promoter Holding

* ROE for 6M is not annualised.

Working Capital Intensity

Acetech operates on a trading pattern that is highly dependent on working capital. In FY25, the trade receivables stood at ₹18.77 Cr, and the inventory stood at ₹12.70 Cr. This resulted in a cash conversion cycle of approximately 175 days. This is an indication that the growth of the company is highly dependent on credit management, receivables, and inventory turnover rather than investing in fixed assets.

Asset-Light but Capital Absorbing

The company is asset-light, with a revenue of ₹60.73 Cr in FY25, but it is capital-absorbing.However, the company has invested a large amount of its capital in current assets, specifically in trade receivables, rather than investing in capital expenditures. Therefore, liquidity management and working capital funding are more important for growth than investing in infrastructure.

Cash Flow Sensitivity

The growth in profits has been accompanied by an increase in borrowings, which stood at ₹20.55 Cr in FY25, with a Debt/Equity ratio of approximately 1.42x. In trading companies, accounting profits are not necessarily translated into operating profits. This makes receivables management and funding a critical factor for maintaining financial stability.

Profitability Profile

The revenue has grown from ₹29.96 Cr in FY23 to ₹60.73 Cr in FY25, with a compound annual growth rate of about 42% in two years. The EBITDA margin has improved to 14.8%, and the return on equity is about 55% in FY25. While the profitability numbers are quite impressive for a trading company, the trick to continued success will be to keep the procurement costs low and the working capital cycle shorter.

Peer Comparison

Sector Specific Ratios

The company's revenue has grown from ₹29.96 Cr in FY23 to ₹60.73 Cr in FY25, with a CAGR of ~42% in two years. The EBITDA margin has improved to 14.8%, and return on equity is ~ 55% in FY25. While the profitability numbers are quite impressive for a trading company, the trick to continued success will be to keep the procurement costs low and the working capital cycle shorter.

LMVT Framework  

Leadership: The promoter group has quickly expanded the business from FY23 to FY25. The next phase of growth will require better working capital management, tighter receivable terms, and debt management.  

Moat: The trading and distribution sector has low barriers to entry. The sustainable competitive advantage derives from supplier relationships, pricing power, and credit risk management, rather than regulatory or technological advantages.  

Valuation: Profitability metrics are robust for a trading business, but the company operates with a 175-day cash conversion cycle (FY25) with borrowings of ₹20.55 Cr. It will be essential to sustain 14-15% EBITDA margins and improve working capital days to support a premium valuation.  

Tailwinds: Infrastructure development, housing demand, and the formalisation of the building material value chain in India support trade volumes over the long term. Scale and supplier consolidation opportunities exist for organised trade intermediaries. 

Bottom Line: Acetech E-Commerce is a rapidly growing building material trading business in a competitive and working-capital-driven sector. The opportunity exists in driving trade volumes while sustaining spreads. The key risk lies in managing working capital and striking a balance sheet.