SG Mart- Can it successfully create a marketplace?

SGMART is a B2B one-stop shop that provides a wide range of construction-related solutions from top brands under one roof. The company aims to establish itself as the trusted and preferred platform for all infrastructural and building material needs in India.


The company used to be Kintech Renewables. The company was earlier engaged in activities relating to the renewable energy sector. The promoters then were Aditya Singhal, Saurav Singhal, Ambala Patel and Jigar Shah.

In April-23, New promoters Meenakshi Gupta and Dhruv Gupta bought out the company for INR 22 crs. The promoters belong to the APL Apollo group family.


TMT Bar, MESH NET, Binding Wire, Welding Rod, Steel Tube, Sanitaryware, Bath fittings, Laminates, Galvanised Sheet, HR Coil & Sheet, All Ceramic Range of Tiles, Premium Tiles Adhesive & Grouts, Double Charge Tiles division, Home appliances, Lighting for Domestic, Commercial & Industrial applications, LED Lighting, Fans, Modular Switches & Wiring Accessories, Water Heaters, Industrial & Domestic Circuit Protection Switchgear, and Industrial & Domestic Cables and Wires. Looking ahead, the company plans to expand its product line, adding Barbed Wire, MS Bar, Angle, ISMC Channel, ISMB Beam, and Patti Flat.

Brands being sold:

4 large brands- APL Apollo TMT bars, Kajaria Tiles, Havells electricals, SG premium
Other Brand partners- NMDC, JSW Steel, Jindal Steel and Power, Hindustan Zinc, Godawari Power and ISPAT, Triveni Enterprises, etc.

Industry dynamics:

  • India is the 7th largest manufacturing hub and the 5th largest retail distribution market globally for construction materials.
  • This sector is yet to be disrupted by technology, with the penetration of B2B marketplaces at under 1% today v./s China and USA, where digital adoption is as high as 20%.
  • 100-300% annual growth in leading B2B marketplaces since COVID – sustained shift in adoption

Industry issues:

  • Fragmented supplier base
  • Limited vertical integration between different stages of material transformation and its final usage
  • SMEs often have a problem in buying good quality steel due to minimum amount of steel which the manufacturer sells is more than the SME requires
  • Long lead time for delivery to distributors
  • No standardized prices

Industry size:

Segment Product Market Size, FY24 FY2027E
Downstream Steel 4.1 Trillion 5.6 Trillion
Fixtures & Fittings (Bath fittings, Electrical fittings) 1.3 Trillion 1.8 Trillion
Tiles industry 0.4 Trillion 0.6 Trillion
Total 5.8 8

Other Investors and fund raising:

In Nov-23, The company raised equity shares worth 878 crs, at Rs 5000 per share, Rs. 10 face value. The top allotees from this were:

Allottees No of equity shares Value (in crs)
Kitara PIIN 1103 202,000 101
Plutus Wealth Management LLP 200,000 100
QRG investments and Holdings Ltd 100,000 50
Blue Foundry Advisors LLP 100,000 50
Vallabh Bhanshali 50,000 25
SageOne-Multiple 50,000 25
Turnaround opportunities fund 40,000 20
Abbakus 80,000 40
Rikeen P Dalal 30,000 15
360 One special Opp Fund 30,000 15
Mukul Mahavir Agarwal 30,000 15
Ashok Goel Trust 24,000 12
High Conviction Fund 20,000 10
Madhuri Madhusudhan kela 20,000 10
Top allottes 976000 488

The company also issued warrants at the time, at Rs 5000 per share to non-promoter category:

Particulars No of shares Value (in crs)
Rohan Gupta 382,000 191
Marigold Partners 90,000 45
Shivkumar Bansal 75,000 37.5
Rohit Gupta 50,000 25
Deepak Kumar 25,000 12.5
Anubhav Gupta 25,000 12.5
Kanhaiya Sharma 10,000 5
Anjana Bansal 10,000 5
Arun Agarwal 10,000 5
Payal Jain 10,000 5
Ravindra Kumar 10,000 5
Chakram Singh 5,000 2.5
Amit Kapoor 5,000 2.5
Bhanu Singh 5,000 2.5
Utkarsh Dwivedi 5,000 2.5
Ankit Jain 3,000 1.5
Atul Jain 3,000 1.5
Total 723,000 361.5

In February 2024, the company split the stock 10:1, and issued bonus shares on the same.


The new company started operations in June 2023, and since has had 4 quarters of operation.

Particulars Q1FY24 Q2FY24 Q3FY24 Q4FY24 FY24
No. of customers 170 315 426 444
Net Revenue 150 506 748 1277 2681
Raw Material cost 147 493 728 1238 2606
% of rev 98.00% 97.43% 97.33% 96.95% 97.20%
Gross profit 3 13 20 39 75
GP Margin 2.00% 2.57% 2.67% 3.05% 2.80%
Employee cost 0.5 0.9 0.15 0.21 1.76
Other expenses 0.7 0.2 0.1 0.52 1.52
EBITDA 1.8 11.9 19.75 38.27 71.72
EBITDA Margin 1.20% 2.35% 2.64% 3.00% 2.68%
Other income 0 1.1 9.6 20.9 31.6
Interest Cost 0.1 0.3 3.4 7.9 11.7
Depreciation 0 0.1 0.1 0.3 0.5
PBT 1.7 12.6 25.85 50.97 91.12
Tax 0.4 3 6 10.9 20.3
Tax rate 23.53% 23.81% 23.21% 21.39% 22.28%
Net Profit 1.3 9.6 19.85 40.07 70.82

The company has given a guidance of reaching INR 18,000 crs of revenue in FY27.
In typical APL Apollo group company fashion, it works on negative working capital (-5 days)


  • Creating a marketplace for construction materials has a larger purpose to also standardise the industry and move the players to a more organised supply chain.
  • The pedigree of the group is certainly to its advantage.
  • Creating one more supply channel should also be beneficial to other brands wanting to diversify their supply chains.
  • Current valuations although steep, can be justified at the expected 60-80% topline and bottomline CAGR for the next 3 years.


  • The company’s current valuation is steep, 65 PE. However with the assumed growth it may reach a comfortable level.
  • There is not enough information out in the open, with the company not conducting concalls so far.
  • The company has achieved proof of concept in the last few quarters, however to drive deeper penetration and creating a category is fairly untested.
  • Risk of dilution of shares via either warrants or more fund raising.
  • Trading business has a lot of competition and thin margins, company may have to go even lower to sustain topline momentum.

Disclosure- Invested


How it’s different from Shankara. It also has some stake of apl Apollo

APL APOLLO MART seems to be in a similar line of business, so what could be the reason for them to start SG Mart, when APL MART was already up? How well are they placed with unlisted players like Market.infra?


The new promoters are family of APL Apollo.
@Akshada_Deo PE basis FY24 financials wont be the right picture. Major part of revenue & profits for FY24 was made only in Q4 post management change. So forward PE for FY25 will be significantly low assuming if Q4 replicates for 4 quarters of FY25. If the Q4 business is extrapolated for FY24, then earning is 4 time the earning of Q4.

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Shankara is primarily expanding into retail, B2C


Found it strange for such a newly set up company, Promoter is selling shares so frequently; they have sold 1.4 cr shares over last 4 months; and have taken out much more money than what they have invested (incl warrants);
SG Logistic mgmt: buys 25 lakh shares from the Promoter on 27th june @ 440 per share but on 9th july sells 9 lakh shares @ 425 per share so much for long term investing,another weird thing is that this company was formed just two years back with a similar name as sgmart…it looks like a related party entity even though not shown as promoter grp so free to keep on selling shares without any major disclosures . source: Sg Logistic Management Private Limited - About (check shared directorship)

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APL apollo’s promoters have a history of buying companies with almost nil revenue instead of opening up new ones. Similar was done with SG finserve as well.

As far as fundraising is concerned, my estimation is theyd rather sit on funds and use them immediately at need rather than do fundraising when the need arises.

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Am not talking abt fund raising by company at all. that in my opinion is good for the company. am talking abt promoter individually selling their shareholding: (source: screner)

yes thats right, if they can continue the momentum valuation is not a concern

Not sure, but looks like some internal family rearrangement. I could be wrong. Under public, Neera Gupta has acquired 12%.


Another interesting part is that Havell’s promoter group Qrg Investments and Ashish Kacholia has a stake in this company!

And Neera Gupta is Apl chairman’s wife :face_with_raised_eyebrow:

Neera gupta shareholding is coming from Sahil gupta; Sahil gupta used to own 13.45% in dec shareholding now he owns only 1.34% and 12.1% is ownd by neera gupta in June shareholding


Not sure, there is gap of 1qtr. The names I’m suspicious of related transactions. After this there is still gap of 24% from the Sept holdings of 94%. Pls note we cant see below 1% transactions. What are they doing :face_with_monocle:
Hope annual report will give better clarity

Their website is still under development. Where are they selling these products? Isn’t that supposed to be online ? Right now we are not able to view prices of different products that they have. This industry deals with lot of cash and that is one of the biggest reasons why this sector is largely unstructured and unorganized. If you start selling these products online then all the transactions are booked and cash dealings become difficult. If SG Mart is able to sell these products online and change the way this industry works then it could be a game changer but it will have its fair share of struggles and challenges.


2027 guidance- 180bn= 18,000 cr sales ,
so PAT 2% will be 360cr,
so EPS - 360/11.2=32.14 ,
so forward FY27 P/E will be - 400/32.14=12.4

Ratios of this company is better than Shankara buildpro.(Debtor days, receivables etc)

75% holdings in strong hands ie 11.2 cr ka 75%=8.4cr.

Public float =11.2cr-8.4cr=2.8cr.

My query is when there is decent public float available then why this stock trade in circuit to circuit?

They have huge cash which is earning them “other income”…so by 2027 that other income may not be there…pls note that operating and net margins cannot be the same…IF at all they have no interest expense and depreciation as well as no other income, they still need to pay tax…so PAT margin will not be equal to Operating Margin.


Sir going forward OPM will also not remains the same and shankara buildpro has average PAT margins of 1.5-2% ,but shankara has bad ratios and SG Mart having good ratios (negative cash conversion days) we can give it PAT margins of 2%(if you want to become more conservative then you can use 1.5% as well).If still i am wrong anywhere please feel free to interact.

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