Income Tax authorities have raided offices of the company in several cities, including Noida, Hyderabad, Bengaluru, Pune and Mumbai.
“The founders’ homes were also raided,” one of the sources told ET. “There were some fake invoices and tax evasion noticed and investigation is being carried out for the same,” he added.
In an emailed response to queries from ET, a spokesperson for the company said, “At Infra.Market, we give utmost importance to ensure we are in compliance with the law of the land at all times. The assertions in your mail are incorrect and misleading, [and] therefore, denied.”
“Tax authorities have raised certain queries due to non-filling of returns by certain suppliers and we are duly cooperating with them. However, we are legally bound not to publicly comment on it until further notice,” the spokesperson added.
Corporate governance has been a niggling issue for many global and domestic risk investors, who have been struggling to make their portfolio companies compliant with laws. In the recent past, companies such as BharatPe and Trell have been investigated following allegations of financial irregularities.
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The raids come at a time when Infra.Market was reportedly stitching together a funding round from new and existing investors, looking to raise close to $450 million at a valuation of more than $4 billion. Infra.Market entered the unicorn club in January 2021 when it
raised $100 million in a round led by Tiger Global. It again
raised $125 million from Tiger Global, catapulting its valuation to $2.5 billion.
Founded by Souvik Sengupta and Aaditya Sharda in 2016, Infra.Market uses technology to provide a smooth procurement experience for construction companies.
In October 2021 it said it had posted a 3.5x jump in revenues to Rs 1,242.9 crore for the year ended March 2021 on the back of heightened demand from tier I and II cities, ET had reported. For 2019-20, Infra.Market had reported revenues of Rs 350.8 crore.
The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) stood at Rs 68.9 crore in FY21 against Rs 13.6 crore in FY20.
Sengupta had told ET that the company was expecting five times growth in revenues for the current financial year to Rs 6,670 crore on the back its growing private label business and B2B initiatives.
The company has also been on a shopping spree. Last May it acquired a majority stake in Equiphunt, a Hyderabad-based construction equipment rental service for $10 million. In September 2021 it acquired RDC Concrete India from True North, and in January this year, it acquired a 24% stake in Shalimar Paints.
Infra.Market focuses on high-volume construction products under its own brands and aims to solve existing issues such as a lack of price transparency, unreliable quality, fragmented vendor base and inefficient logistics. The company caters to both institutional customers (B2B) and retail outlets (D2R) in the construction materials sector. It supplies across 10 states in India and exports to markets such as Dubai, Singapore and Bangladesh.
