Shares of IdeaForge Limited, India’s largest drone maker, are expected to be listed on the BSE and NSE soon. The initial public offering (IPO) will go public on Monday, June 26th and will close on June 29th. The company proposes to raise the total of 567 billion 327 crore.
The company has reserved 75 percent of the offering volume for qualified institutional buyers (QIBs), 15 percent for high net worth individuals (HNIs) and the remaining 10 percent for individual investors. The IPO is expected to raise Rs 550.69 crore and Rs 567.24 crore at the low and high end of the price range respectively.
Proceeds from the new issue of Rs.50 crore will be used to pay off debt and Rs.135 crore to fund the working capital gap, Rs.40 crore to invest in product development and the remaining amount for general corporate purposes, the company’s co-founders said DH.
When asked why the company allocated less of a share to product development, Ankit Mehta, Founder, CEO and Co-Founder of IdeaForge said, “We are profitable on the economic level of each entity, so we can invest in product development as well.” Overall are the projections for our proposed capital utilization period reasonable.”
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“We will soon expand our offering into two product categories – tactical unmanned aerial vehicles (UAVs) and mid-mile logistics drones with a payload in the 100-200 kg range and a range of 100-200 kilometers,” said Mehta DH. The company will also continue to focus on adding more use cases in existing categories, including last-mile delivery capability, inspection of vertical assets, and developing new payloads and software applications, he added.
In conversation with DHRahul Singh, vice president of technology and co-founder of IdeaForge, emphasized: “We believe that last mile delivery will bring challenges in terms of a sustainable, profitable unit economy when it comes to covering local delivery costs.” And so our focus today is more on the medium delivery.”
Last week, IdeaForge raised about Rs. 254 crore from anchor investors ahead of the IPO. The round was attended by some of the top domestic and foreign investors including Nomura, Invesco, Tata AIA General Insurance Company, HSBC, ICICI Prudential Mutual Fund, Mirae Asset Mutual Fund, HDFC Mutual Fund and Goldman Sachs.
The company also raised Rs. 60 crore in a pre-IPO placement round from institutional investors including Tata AIG General Insurance, 360 One Special Opportunities Fund – Series 9 and 10, Motilal Oswal Midcap Fund and Think Investments PCC.
According to the company, investors can bid for a minimum of 22 shares at the public offering and multiples of 22 shares thereafter.
Founded in 2007 by graduates of IIT Bombay, IdeaForge has a market share of almost 50 percent in the Indian unmanned aircraft systems sector. Referring to the challenges in the Indian drone market, Mehta said, “The recent liberalization of policy on the export of drones/UAVs for civil end uses from India has largely eliminated the major bottleneck in the drone industry growth in the domain.” The certification for operations outside Line of sight (BVLoS) in civilian space is probably the only remaining bastion left to be destroyed, he added.
IdeaForge’s leadership team seemed optimistic about market opportunities in the growing drone market. “Since the beginning of the pandemic, the industry has become an indispensable technology. The civilian side is really tapped and with political intervention, the potential has just started to build up,” Mehta said.
The global drone industry is expected to grow rapidly at a CAGR of approximately 20 percent from calendar year 2022 to 2030, reaching a value of nearly US$91.3 billion by fiscal year 2030. The Indian drone market is expected to grow from US$43 million in FY22 to US$812 million in FY27, representing an 80 percent compound annual growth in FY22-27.
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