The IPO (initial public offering ) for India’s largest drone maker, ideaForge Technology Ltd, opens for subscription today, i.e. Monday, June 26 and will be available for public to bid till June 29. The price band for the IPO has been set at Rs 638-672 per share.

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ideaForge plans to raise nearly Rs 570 crore through its issue, out of which Rs 240 crore will be raised through fresh issuance of equity.

The company has also undertaken a Rs 60-crore pre-IPO funding, in which 360 One, Think Investments, Tata AIG, Motilal Oswal were buyers. Through its IPO, ideaForge is looking at post-issue implied market cap of up to Rs 2,800 crore.

Out of the Rs 240 crore which will come into the company through the IPO, Rs 50 crore is expected to be used towards debt repayment and Rs 135 crore towards working capital requirement. Following the utilisation of funds, the company’s debt is expected to come down to Rs 35 crore. As per the management, it is expected to hover around Rs 30 crore levels.

ideaForge Technology Ltd was incorporated in 2007. It is the pioneer and market leader in the Indian unmanned aircraft systems (UAS) market, with a market share of approximately 50 percent in FY22.

The company had the largest operational deployment of indigenous UAVs across India, with an ideaForge manufactured drone taking off every five minutes on an average for surveillance and mapping, as of fiscal 2023.

The company’s product portfolio consists of hardware, software and embedded sub-systems and solutions. Their growth over the years is attributable to their indigenous design and technological capabilities, ability to invent, design and deliver customer-centric offerings, and their vertically integrated operations.

Product portfolio

Hardware, which primarily includes UAVs, payloads, batteries, chargers and communication system

Software and embedded sub-systems, which includes the ground control station (GCS) software

Solutions, which enable industry- and application-specific software that enhance the value of their UAVs to the end customer

Earlier, the company has raised funding from various investors like Infosys, Qualcomm Asia Pacific, Celesta Capital II Mauritius, Celesta Capital II-B Mauritius, Florintree Enterprise, Export Import Bank of India and Infina Finance.

The promoter and promoter group hold 35 percent in the company right now and post-IPO will continue to hold over 30 percent stake in the company.

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The company has grown at a compound annual growth rate (CAGR) of 137 percent in terms of revenue from operations over the last three fiscals, with a Return on capital employed of 12.51 percent in FY23.

The defence segment contributed 69 percent to company’s revenue in FY23 whereas the balance 21 percent came from civil applications. The management, in an interaction with CNBC-TV18, said that they expect to grow the civil side of the market significantly.

Competitive Strengths

Pioneer and the market leader in the Indian UAS industry, with first-mover advantage.

Diversified product portfolio with a robust technology stack and track record of successful outcomes in critical use cases.

Strong relationships with a diverse customer base.

Significant product development capabilities powering the software and solutions and product differentiators.

Inhouse design to delivery capabilities.

Strong management capabilities with a demonstrated track record of delivering robust financial performance.

Continuing to invest in product innovation, engineering and design.

Expanding into international markets.

Expanding the product portfolio and catering to new end-use applications and industries

Focus on indigenisation

(Written with inputs from Axis Capital)

(Edited by : Shoma Bhattacharjee)

First Published:Jun 21, 2023 8:58 PM IST