IPO of IdeaForge Technology Ltd.: Leading Indian UAS Market Pioneer
IdeaForge Technology Ltd. is a top player in the Indian unmanned aircraft systems market, boasting a 50% market share in 2022. With a strong product portfolio, the company aims to utilize IPO proceeds for debt repayment, working capital, product development, and general purposes. Recognized globally, IdeaForge stands out for its advanced UAVs and software solutions, offering surveillance, mapping, and surveying applications. Backed by a skilled team and solid customer relationships, the company's IPO offers an opportunity to invest in a market leader with significant growth potential. Closing date: June 29, 2023.
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IPO ideaForge Technology Ltd. COMPANY OVERVIEW SUBSCRIBE FOR Ideaforge Technology Ltd. (ITL) is the pioneer and the pre-eminent market leader in the Indian unmanned aircraft systems ("UAS") market, with a market share of approximately 50% in Fiscal 2022 (Source: 1Lattice Report). It had the largest operational deployment of indigenous UAVs across India, with an Ideaforge-manufactured drone taking off every five minutes on average for surveillance and mapping as of Fiscal 2023. MEDIUM TO LONG-TERM D ETA IL S O F TH E ISSU E Price Band Rs.638 to Rs.672 Issue Size Rs. 567.00 Cr Opening Date June 26, 2023 ITL's customers have completed over 350,000 flights using its UAVs as of March 31, 2023 (Source: 1Lattice Report). It ranked 7th globally in the dual-use category (civil and defence) drone manufacturers as per the report published by Drone Industry Insights in December 2022 (Source: 1Lattice Report). It has grown at a CAGR of 131.47% in terms of revenue from operations over the last three Fiscals, with a Return on Capital Employed of 12.51% in Fiscal 2023. Closing Date June 29, 2023 Face Value Rs. 10 Bid Lot 22 Listing on BSE, NSE ITL's UAVs are equipped with industry-leading specifications and capabilities, comparable to those of other established global players in the UAV industry. Fresh Issue Rs 240.00 cr. OFS Rs.327.00 cr.
OBJECTS OF THE ISSUE The company intends to utilize the net proceeds from the issue towards the funding of the following objects: 1.Repayment/prepayment of certain indebtedness availed by the company; 2.Funding working capital requirements, 3.Investment in product development, and 4.General corporate purposes.
COMPANYS PRODUCT PORTFOLIO Hardware, which primarily includes UAVs, payloads, batteries, chargers and communication system (which enables communication between the ground control station and the UAVs), Software and embedded sub-systems, which includes the GCS software, which enables the controlling and management for their UAVs and autopilot sub-system, which enables remote control and autonomous completion of flights, Solutions, which enables industry/ application specific software that enhances the value of their UAVs to the end customer. Their wide range of products gives them the necessary flexibility to meet the evolving demands of diverse customers across industries. The company primarily cater to customers with applications for surveillance, mapping, and surveying. Though they do not enter into long-term contracts with their customers, they have developed long- standing relationships with certain of them. As of May 31, 2023, they had about 100 channel partners and 3 national distributors. The company is one of the top vendors globally for dual use drones.
COMPETITIVE STRENGTHS Pioneer and the pre-eminent market leader in the Indian UAS industry, with first-mover advantage Well educated and experienced team 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 In-house design to delivery capabilities Strong management capabilities with a demonstrated track record of delivering robust financial performance
BUSINESS STRATEGIES Continue to invest in product innovation, engineering and design Expanding into international markets Expand the product portfolio and cater to new end-use applications and industries Focus on indigenisation Expand business services and software revenue through as a Service offerings Pursue strategic investment and acquisition opportunities
FINANCIAL DETAILS As at Mar 31, Particular (In Crore) 2023 2022 2021 Equity Share Capital 21.34 0.09 0.09 Instruments entirely equity in nature 0.07 0.04 0.04 Reserves 303.12 163.18 59.62 Net worth as stated 324.72 163.30 59.75 Revenue from Operations 186.01 159.44 34.72 Revenue Growth (%) 16.66% 359.22% - EBITDA as stated 57.49 75.13 (9.25) EBITDA (%) as stated 30.91% 47.12% (26.65%) Profit Before Tax 40.80 50.18 (14.50) Net Profit for the period 31.99 44.01 (14.63) EPS Basic ( ) 8.55 13.84 (5.03) RONW(%) as stated 9.85% 26.95% (24.48)% NAV ( ) as stated 86.81 51.36 20.57
CONCLUSION / INVESTMENT STRATEGY Company is a leading player in the Indian Unmanned Aircraft Systems (UAS) market with approximately 50% market share in Fiscal 2022. These drones are capable of diverse applications, aiding in mining area planning, mapping, construction and real estate operations, as well as assisting defence forces in ISR operations. It has posted growth in its top lines but for FY23, its bottom line marked decline due to ESOP impact. Though based on FY23 performance, the issue appears aggressively priced. Investors may park funds for medium to long-term rewards.
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