IdeaForge’s ₹567-cr IPO opens on 26 Jun
Summary
The IPO was cleared by the Securities and Exchange Board of India (Sebi) last month, after IdeaForge filed its draft red herring prospectus (DRHP) with the regulator in February. The company has a ₹638-672 per share price band, in lots of 22 shares
New Delhi: Mumbai-headquartered drone maker, IdeaForge Technology, on Wednesday announced that its ₹567-crore initial public offering (IPO) will open for subscription on 26 June. Ankit Mehta, chief executive of IdeaForge, told Mint the company will use the capital raised to build “tactical-grade and middle-mile drones", and expand its scope of business.
The IPO was cleared by the Securities and Exchange Board of India (Sebi) last month, after IdeaForge filed its draft red herring prospectus (DRHP) with the regulator in February. The company has a ₹638-672 per share price band, in lots of 22 shares.
In its DRHP filing, the drone manufacturer cited an industry report to state that it holds 50% of India’s domestic drone manufacturing market. Its regulatory filing further rev-ealed that it drew over 69% of its FY23 revenue from defence sector contracts, while civil contracts accounted for just over 21%. The company reported ₹186 crore as operating revenue for FY23, and became profitable in the last fiscal’s September quarter.
However, despite a 16.7% rise in revenue, IdeaForge’s after-tax profit fell to ₹32 crore in FY23, from ₹44 crore in the previous fiscal.
IdeaForge’s IPO marks the second drone manufacturer to go public, after Pune-based Droneacharya listed on the BSE SME exchange in December. The latter listed at a premium of 90% over its issue price band of ₹52-54 per share.
IdeaForge counts Infosys and Qualcomm among its investors. Mehta said Qualcomm will offload a part of its holding in the company, “due to internal operating reasons."
As part of its expansion, Mehta said, “Our middle-mile drones will be a new category, and will be able to carry 100kg payloads for 100km. Within the civil drones category, we’ll look to expand to more private users that would include government agencies working on public safety projects."
IdeaForge disclosed receipt of ₹17.4 crore in production-linked incentive for drone manufacturing from Ministry of Civil Aviation, to date. It attributed its drop in net profit to employee stock ownership plan (Esop) allocations—which rose to ₹50.9 crore in FY23, up from ₹26.8 crore in FY22 and ₹19.2 crore in FY21. Of this, the company disclosed ₹11.8 crore under Esops in FY23.
However, Mehta affirmed that the company will not expand into full-stack manufacturing of drones, and continue to design “key components" in-house—while outsourcing manufacturing and assembly to partners.
“Around 20% of our overall components are imported, and that is a healthy balance that we will continue to maintain even after our fundraising. Expanding to full-stack manufacturing is not practically feasible, either—we will still need to import chips that go into drones. But, we will continue to invest in designing crucial components in-house, and use the fresh funds to tap into the growing market demand for drones right now," Mehta said.
He added that despite a slowdown, the present market is “strategically correct" for IdeaForge to raise funds and expand its operations.
