ideaForge Technology IPO Review: ideaForge Technology is coming up with its Initial Public Offering (IPO). The IPO will be open for subscription on June 26th, 2023, and close on June 29th, 2023. The company is looking to raise Rs 567 Crores through IPO. Out of this, Rs 240 Crores will be a fresh issue and the remaining will be an offer for sale of 48.69 lakh equity shares worth Rs 327 Crores.

In this article, let us look deeper into the ideaForge technology IPO Review and its future prospects, financials, opportunities, threats, and many more. Keep reading to know more!

ideaForge Technology IPO – About the Company

ideaForge Technology IPO

ideaForge Technology is a drone manufacturing company that was incorporated in 2007. The company is engaged in the manufacturing of drones for defence and industrial applications. It is a pioneer and an eminent market leader in the Indian Unmanned Aircraft Systems (UAS) market, with a market share of around 50% in FY22. 

The company’s customers have completed over 3 lakhs flights using their UAVs as of 31st December 2022. The company caters to domestic as well as international customers across various sectors like Mining Area Planning and Mapping, Volumetric Estimation, Land Survey, Border and Coastal Security surveillance, Crime control, agriculture, and many more.

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If we look into the global drone industry, it was valued at US$ 21.1 billion in 2022 and is expected to grow at a faster pace at a CAGR of 20% which would be approximately US$ 51.4 billion by 2027.

As a feather in the cap, ideaForge has achieved the record of the largest operational deployment of indigenous UAVs across India with an ideaForge drone taking off every 5 minutes for surveillance and mapping on an average. The company has also ranked 7th globally in the dual-use category(Defense and Civil) drone manufacturers as per the reports of Drone Industry Insights, December 2022.

Products of the Company

The product portfolio of the company consists of both hardware products as well as software solutions. Let us look into the segments one by one.

Hardware

  • NINJA UAV: Used for security and surveillance
  • RYNO UAV: IT is a micro UAV used in mapping and land survey
  • Q6: It is a small UAV used in the Construction and real estate industry
  • Q4i: It is a VTOL UAV used in surveillance and traffic
  • NETRA V4+: It is a portable UAV used in crime control and wildfire management
  • SWITCH: Used in the anti-terrorism field
  • NETRA V4 PRO: Used in defence and public safety

Software and Embedded sub-system

  • BlurFire Touch: Useful in mapping mining areas.
  • Autopilot: Helps in GPS error handling in airplanes

Solutions

  • BlueFire Map Assist: Useful in Mapping and Surveying
  • BlueFire Live: Useful in campus security, remote monitoring, and many more
  • Surveillance Pro: Helpful in crowd monitoring and disaster management
  • GIS Pro: Used in survey grade mapping
ideaForge Technology IPO - Products

ideaForge Technology IPO – Financial Highlights

If we look at the financials of ideaForge Technology IPO we can see that their assets have increased from Rs 123.74 in FY March 2021 to Rs 487.93 Crs in FY March 2023.

Similarly, the revenue of the company has also been increasing on YoY basis from Rs 36.35 Crs in FY21 to Rs 196.40 Crs in FY23, which is a jump of more than 6 times within a span of 3 years. 

Moving on if we see the net profits of the company, the company was at a loss of Rs 14.26 Crs in FY21 which recovered at a really faster pace in the immediate next fiscal year with a profit of Rs 44 Crs. But the profits in the subsequent year have been reduced due to the increase in overheads in the fiscal year 2023.

Another key metric to consider here is that the borrowings of the company have considerably increased from Rs 12.79 Crs in FY21 to Rs 86.50 Crs in FY23.

The balance sheet of ideaForge TechnologY

balance sheet of the company

Source: RHP of the Company

The Profit and Loss Statement of ideaForge Technology

Profit and loss statements

Source: RHP of the Company

Summary of Key financial ratios of ideaForge Technology

Financials Information
ideaForge Technology IPO - Revenue

Source: RHP of the Company

Competitors of the company

As per the RHP of the company, ideaForge has demonstrated strong financial performance compared to its competitors. It has showcased the highest revenue growth of 237.5%CAGR over FY 22-20. Furthermore, the company has a gross margin of 74.1%, an EBITDA margin of 45.9%, and a PAT margin of 27.6% in FY22, which is the most profitable among its peers.

ideaForge Technology IPO - Competitors

Source: RHP of the Company

Strengths Of the Company

  • The company is a pioneer and the pre-eminent market leader in the Indian Unmanned Aircraft Systems (UAS) market. Thus, it has a first-mover advantage due to which ideaForge Technology is one of the few companies in India to enter the Unmanned Aerial Vehicle (UAV)  market.
  • It is also the first organization to manufacture VTOL UAVs in India in 2009, which is an aircraft that can depart, hover and land vertically. These VTOL drones can even maintain stable flight in harsh weather conditions which would be of great use in the defence industry.
  • ideaForge Technology was the first company to participate in the demonstration of 5 G-enabled UAVs at the Indian Mobile Congress held in 2019. These kinds of first-mover advantages help the company in acquiring a major market share compared to its peers.
  • The company has a diversified product portfolio with a robust technology stack and a track record of successful outcomes in critical use cases also. Each of the UAVs is designed with differentiations for addressing specific customer needs. Further, they are deployed in multiple use cases across defence and civil sectors.
  • The company has an In-House design to deliver capabilities to focus on performance, reliability, and autonomy. This comprehensive In-house manufacturing facility helps in increasing the productivity of the company.
  • Above all, if we see the Indian drone market, there is a vast growth opportunity in various sectors like agriculture, mining, defence, and many more. This could be a sign of the future growth potential of the company.
  • Additionally, The policy environment in the Indian drone space is becoming more liberal and relaxed. Regulations such as ‘The Drone Rules 2021’ will further encourage the increase in the company’s production capacity.

Weaknesses of the Company

  • The company has a significant gap in working capital. Hence, if the company is unable to raise additional capital in the future, it would adversely impact the business of the company.
  • The company is highly dependent on global vendors for the supply of components and raw materials. Hence, if any difficulties arise in the import of raw materials, it would lead to delays in manufacturing and the subsequent processes. This delay may cause damage to the business in the long run.
  •  Adding on to the above points, the fluctuations in the exchange rates may significantly affect the cost of production of the company. Because most of its components are imported from foreign countries.
  • Along with the first mover advantage comes the newly associated risks. The company manufactures technologically advanced products which could have unknown defects or errors. This drawback may result in reducing the quality of the product until the issue is fixed.
  • The company is dependent on a single manufacturing facility. Hence, in case of any problem at the facility, it would directly disturb the manufacturing schedule of the company as well as its financials in the long run.

ideaForge Technology IPO Review – Key IPO Information

ParticularsDetails
IPO SizeRs 567 Cr
Fresh IssueRs 240 Cr
Offer For SaleRs 327 Cr
Opening DateJune 26, 2023,
Closing DateJune 29, 2023
Face ValueRs 10 per share
Price BandRs 638 to Rs 672 Per Share
Lot Size22 shares
Minimum Lot Size1 (22 shares)
Maximum Lot Size13 (286 shares)
Listing DateJuly 7, 2023
Source: DRHP of the company

Promoters: Ankit Mehta, Rahul Singh, and Ashish Bhat

Book Running Lead Managers: JM Financial Limited and IIFL Securities Limited

Registrar to the Offer: Link Intime India Private Limited

The Objectives of the Issue

Following are the Objectives of the issue by the company

  • Repayment/prepayment of certain indebtedness availed by our Company
  • Funding working capital gap
  •  Investment in product development
  • General corporate purposes

ideaForge Technology IPO Review – GMP

The shares of ideaForge Technology traded at a premium of 72.17% in the grey market on June 21st, 2023. The shares are estimated to trade at Rs 1157. This gives it a premium of Rs 485 per share over the cap price of Rs 672.

Closing Thoughts

In this article on ideaForge Technologies IPO Review, we looked in detail at the key information of the company including its overview and financials. Market analysts anticipate strong investor interest in IdeaForge’s IPO. This is because of the company’s dominant position in India’s drone market, a sector that is expected to grow exponentially over the coming years. That’s it for this post. Happy Reading!

Written by – Bhagyalakshmi Patil

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