IdeaForge, founded in 2007, is a market leader in the Indian unmanned aircraft systems (UAS) market, with a 50% market share in Fiscal 2022. They have the largest operational deployment of indigenous UAVs across India. As of March 31, 2023, customers completed over 350,000 flights using their UAVs. The company has filed 41 patent applications, including 20 international and 21 in India. They cater to domestic and international customers across defense and civil sectors, primarily for surveillance, mapping, and surveying applications.
The company's product portfolio includes hardware, software, embedded sub-systems, and solutions. The company has flown over 4,500 flights under warranty and is developing UAVs as an on-demand service solution. The company has grown at a CAGR of 131.47% in revenue from operations over the last three fiscals, with a Return on Capital Employed of 12.51% in Fiscal 2023.
IdeaForge Limited IPO Details:
| IPO Open Date | June 26, 2023 |
| IPO Close Date | June 29, 2023 |
| Listing Date | July 7, 2023 |
| Face Value | Rs. 10 per share |
| Price | Rs. 638 to Rs. 672 per share |
| Lot Size | 22 |
| Issue Size | Approx. Rs. 567 cr. |
| Pre-IPO Placement | Rs. 60 cr. |
| Fresh Issue | Rs. 240.00 |
| Offer for Sale | 4,869,712 shares of Rs. 10 |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| QIB Shares Offered | Not more than 75% of the Offer |
| NII (HNI) Shares Offered | Not less than 15% of the Offer |
| Retail Shares Offered | Not less than 10% of the Offer |
| Company Promoters | Mr. Ankit Mehta, Mr. Rahul Singh, and Mr. Ashish Bhat. |
Objects of the Issue
| Particular | Amount (Rs. mil) |
| Repayment/prepayment of certain indebtedness availed by the Company | 500 |
| Funding working capital gap | 1350 |
| Investment in product development | 400 |
| General corporate purposes | - |
RISK FACTORS
- A lengthy working capital cycle in the past, which might follow in the future, could have an adverse effect on financial conditions.
- They are highly dependent on global vendors for the supply of components and may need help to reduce their dependency on such imports.
- Business is dependent on their single manufacturing facility. Any slowdown or shutdown in manufacturing operations could have an adverse effect on business.
- They operate in an industry that is highly regulated and subject to change. Failure to comply with the regulations laid down by the government can impact business.
- They can face potential challenges if the government budget declines, resulting in reduced orders, contract terminations, and policy changes. In FY23 government's share in total revenue from operations stood at 69.85%, down from 89.01% in the preceding year.
- Ineffective competition negatively impacts business, operations, financial condition, and cash flows.
OPPORTUNITIES
The Indian drone industry is driven by industry-friendly policies, increased demand for monitoring and surveillance, cost-effective data collection, and new use cases like utility inspection and search and rescue operations. The industry benefits from a favorable ecosystem created by government policies, including the modified Indian Trade Classification Schedule-1 (Import Policy), addressing both demand and supply sides of drone production.
Drone technology is a rapidly growing sector with a potential market size of around $2.71 billion in India. The industry is projected to grow from $43 million by Fiscal 2022 to $812 million by Fiscal 2027, with a CAGR of 80% over Fiscals 2022-2027.
STRENGTHS
First-mover advantage
IdeaForge entered the UAV market in 2009 and enjoys first-mover advantage, the company holds market share of around 50% in Fiscal 2022. They rank 7th globally in the dual-use category drone manufacture.
Diversified portfolio
The company offers a diversified product portfolio of UAVs for various use cases, including civil and defence applications. The company's UAVs have been tested in extreme conditions, including high altitudes and deserts.
Diverse consumer base
The company has grown by providing advanced customer-centric solutions for surveillance, mapping, and surveying. They cater to domestic and international sectors, including Indian defence forces and civil customers and 35% of their total customers being repeat customers.
In-house product development centre
They has integrated a In-house product development centre that has a strong product development center, enabling the design, development, engineering, and manufacturing of UAVs which in turn helped in customization, and cost reduction while maintaining margins. The company also has a custom battery management system, ensuring high cycle life and optimized battery life.
In-house design to delivery capabilities
In-house design to delivery capabilities enable UAVs to be designed, developed, and manufactured in-house, focusing on performance, reliability, and autonomy. The company's manufacturing facility in Navi Mumbai, Maharashtra.
Company Strategy
Invest in product innovation
Evolution is necessary everything and investing in product innovation, engineering, and design is crucial for growth. The company focuses on continuous product development and enhancing its technology stack. The company plans to invest substantially in product innovation, engineering, and design to expand offerings and increase market presence.
Expansion in foreign market
The global drone industry is expected to grow at a CAGR of 19%, reaching $51.4 billion in 2027 and 91.3 billion by 2030. The company has a strong presence in the US, Bangladesh, Vietnam, and Nepal, and plans to expand into the US market.
Expansion in product portfolio
The company plans to expand its product portfolio and offer differentiated UAV offerings in various sectors, including infrastructure, retail, agriculture, and logistics.
Financial performance
| Particulars | 31-Mar-23 | 31-Mar-22 | 31-Mar-21 |
| Revenue from operations | 1860.07 | 1594.39 | 347.18 |
| Other income | 103.95 | 20.09 | 16.17 |
| Total Income | 1964.02 | 1614.48 | 363.35 |
| Cost of materials consumed | 957.38 | 519.9 | 220.99 |
| Changes in inventories | -368.8 | -101.69 | -37.96 |
| Employee benefits expense | 509.13 | 268.53 | 192.49 |
| Finance costs | 49.35 | 176.7 | 16.72 |
| Depreciation and amortization | 118.58 | 72.84 | 35.81 |
| Other expenses | 291.43 | 182.43 | 80.34 |
| Total Expenses | 1556.07 | 1112.71 | 508.39 |
| Profit/loss for the year | 319.88 | 440.06 | -146.26 |
| Particulars | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 |
| EBITDA | 574.88 | 751.31 | -92.51 |
| EBITDA margin % | 30.91 | 47.12 | -26.65 |
| Adjusted EBITDA | 851.87 | 814.09 | -33.63 |
| PAT | 317.87 | 440.06 | -146.26 |
| PAT Margin % | 17.2 | 27.6 | -42.13 |
| ROE | 13.11 | 39.46 | -22.88 |
| Return on the capital employed % | 12.51% | 49.63% | -15.18% |
| Return on net worth % | 9.85% | 26.95% | 24.48% |
| Revenue from operations split by defence and civil | |||
| Defence | 1286.2 | 1277.66 | 48.29 |
| Defence (% of total) | 69.15 | 80.07 | 13.91 |
| Civil | 399.68 | 317.73 | 298.89 |
| Civil (% of total) | 21.49 | 19.93 | 83.09 |
| Order Book | |||
| Defence | 1851.99 | 3055.34 | 1284.78 |
| Civil | 70.72 | 53.41 | 79.18 |
| Total | 1922.71 | 3108.75 | 1363.96 |
Product portfolio and sub-components
| Product name | Applications | Range |
| Ninja | Security and surveillance | Upto 2 km |
| RYNO | Mapping, land survey, mining area planning,
construction and real estate |
Upto 4 Km |
| Q4i | Security and surveillance, traffic management,
crowd management and disaster relief |
Upto 4 Km |
| Q6 | Mapping, land survey, mining area planning,
construction and real estate |
Upto 10 Km |
| NETRA V4+ | Security and surveillance, border security,
antiterrorism, counter insurgency, crime control and drone as a first responde |
Upto 10 Km |
| switch | Security and surveillance, border security,
antiterrorism, counter insurgency and wildfire management |
Upto 15 Km |
| Netra V4 Pro | Defence, public safety, emergency response, mapping | 15 km |
| Software and embedded sub-system | |
| Product name | Applications |
| BlueFire Touch | Mapping and surveillance |
| Autopilot | |
| Solutions | |
| BlueFire MapAssist | Mapping and surveying |
| BlueFire Live | Security and surveillance, border management,
crowd monitoring, campus security, disaster management, remote monitoring, smart cities, mapping and ISR operation |
| Surveillance Pro | Security and surveillance, border management,
crowd monitoring, campus security, disaster management, remote monitoring and smart cities |
| GIS Pro | Survey grade mapping |
Capacity Utilization
| Products | Installed capacity per day as of March 31, 2023* | Capacity Utilization as on March 31, 2023 * | Capacity Utilization as on March 31, 2022* | Capacity Utilization as on March 31, 2021* |
| Quadcopter UAV | 5 | 95% | 93% | 88% |
| Switch UAV | 4 | 82% | 75% | 0% |
| Payload | 15 | 95% | 96% | 79% |
| Battery | 20 | 87% | 84% | 83% |
| Communication Box | 15 | 90% | 90% | 88% |
Comparison with Listed Industry Peers
No listed company specializes in drone manufacturing. Factors like business scale, defence sector exposure, electronics product manufacturing, and industry peers like MTAR Technologies, Data Patterns India Limited, and Astra Microwave Products are identified for the company.
How to Apply for ideaForge Technology Limited IPO?
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Also Read: How to Open Demat Account: Benefits and Documents Required
Steps to Apply for ideaForge Technology Limited IPO:
Step 1: When ideaForge Technology Limited IPO opens you can apply online.
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Step 3: Here navigate to the IPO section and click on ideaForge Technology Limited IPO.
Step 4: Now fill in all the essential information like price, quantity, and so on.
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Step 5: Finally make the payment and your IPO application is successful.
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How to Check ideaForge Technology Limited IPO Allotment Status?
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