Mumbai-based Drone maker ideaForge Technology 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 has filed its Draft Red Herring Prospectus (DRHP) with the capital market regulator, Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
The public issue with a face value of Rs 10 per equity share comprises of Rs 300 crore of fresh issue and an offer for sale of 4,869,712 equity shares. The offer also includes a reservation for a subscription by eligible employees.
The offer for sale comprising of up to 158,200 equity shares by Ashish Bhat, up to 8,362 equity shares by Amarpreet Singh, up to 22,600 equity shares by Nambirajan Seshadri, up to 22,600 equity shares by Naresh Malhotra, up to 203,400 equity shares by Sujata Vemuri, up to 51,980 equity shares by Sundararajan K Pandalgudia, up to 135,600 equity shares by A&E Investment LLC, up to 53,200 equity shares by Agarwal Trademart Private Limited, up to 1,106,722 equity shares by Celesta Capital II Mauritius, up to 131,758 equity shares by Celesta Capital II-B Mauritius, up to 202,044 equity shares by Export Import Bank of India, up to 1,695,000 equity shares by Indusage Technology Venture Fund I, up to 1,055,646 equity shares by Qualcomm Asia Pacific Pte. Ltd., up to 22,600 equity shares by Society for Innovation and Entrepreneurship.
The Offer is being made through the Book Building Process, wherein not less than 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Investors and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.
The company, in consultation with the lead bankers to the issue, may consider an issue of specified securities aggregating up to Rs 60 crore. If such placement is completed, the fresh issue size will be reduced.
The proceeds from its fresh issuance to the tune of Rs. 50 crore will be utilised for repayment / prepayment of certain indebtedness availed by the Company, Rs 135 towards funding working capital requirements, Rs 40 crore for investment in product development and general corporate purposes.
The Mumbai-based company had the largest operational deployment of indigenous UAVs across India, with its drone manufactured taking off every five minutes on average for surveillance and mapping. It is one of the few original equipment manufacturers ("OEMs") in the world that have its own exclusive autopilot sub-system and ground control software and takes full integration of its payloads, communication system and packaging.
Founded in 2007 and led by first generation entrepreneurs, IdeaForge primarily caters to customers with applications for surveillance, mapping and surveying. Its customers include the armed forces, central armed police forces, state police departments, disaster management forces, forest departments besides other civil customers. It is one of the first few companies in India to enter the UAV market and ranks 7th globally in the dual use category i.e civil and defence as per the report published by Drone Industry Insights in Dec 2022.
The Company was incubated by the Society for Innovation and Entrepreneurship ("SINE"), IIT Bombay and subsequently by CIIE Initiatives, IIM Ahmedabad.
The drones they manufacture are differentiated basis weight, endurance, take off altitude range, communication range as well as the kind of payload it is supposed to carry. Switch UAV, Netra V4 UAV, Q6 UAV, Ninja UAV, Q4i UAV, and Ryno UAV are examples of ideaForge drones that are rugged unmanned aerial vehicles (UAVs) that have been tested in extreme temperatures from -20°C to +50°C, high humidity, marine environment and dusty weather conditions to deliver reliable and consistent performance.
It has filed 62 patent applications, of which 28 were filed in India and 34 were filed internationally. As stated in the DRHP as of Dec 31, 2022 its client have used its UAVs for over 300,000 flights.
There are no listed companies that exclusively undertake the manufacturing of drones. Also apart from manufacturing drones, ideaForge undertakes after sales maintenance for its customers and is in the process of developing UAVs as an on demand service.
Over the past three fiscal years, the drone manufacturer's revenue from operations has increased at a CAGR of 237.48%. Comparing the last 2 fiscals, its revenue from operations increased by 359.24% from ? 34.72 crore in the Fiscal 2021 to ? 159.44 crore in the Fiscal 2022, primarily driven by increase in revenue from sale of products, particularly to its clients in the defence sector.
The company has turned around from being loss making in FY21 to a profit of Rs 44.01 Cr in FY22. For the six months ended September 30, 2022 revenue from operations stood at ? 139.55 crore and profit after tax stood at Rs 45.21 crore.
According to 1Lattice Report stated in its DRHP, the global drone industry is estimated to be worth $21.1 billion (Rs 1.74 trillion) in 2022. The sector grew significantly between 2018 and 2022, with a CAGR of 19%. It is expected to grow even faster, with a CAGR of 20%, reaching an estimated US$ 51.4 billion (Rs 4.25 trillion) in 2027 and soaring to an estimated US$ 91.3 billion (Rs 7.55 trillion) by 2030. By 2030, the Indian drone industry hopes to establish itself as a major drone hub, with a potential market size of about US$2.71 billion (Rs 22,409 crore).
JM Financial Limited and IIFL Securities Limited are the book running lead managers and Link Intime India Private Limited is the registrar for the issue.