Ideaforge Technology Limited IPO

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i. Ideaforge Technologies is a company that designs and manufactures world-class drones for mapping, security, and surveillance applications. It serves in the B2B space in the Aerospace, Maritime and Defense Tech market segments.

ii. It has a vertically integrated business model that includes in-house R&D, design, manufacturing, software, services and training operations3. It also provides end-to-end UAV solutions and services to the industrial and commercial sectors.

 

Some of the products of Ideaforge Technologies are:

i. NETRA Pro: A compact and lightweight VTOL UAV for surveillance and reconnaissance missions. It has a flight time of up to 60 minutes and a range of up to 5 km.

ii. NETRA v2: A rugged and versatile VTOL UAV for day and night surveillance and mapping. It has a flight time of up to 90 minutes and a range of up to 10 km.

iii. Q Series: A family of high-performance VTOL UAVs for long-range and high-altitude operations. They have flight times of up to 180 minutes and ranges of up to 20 km.

iv. SWITCH: A fixed-wing VTOL UAV for mapping and surveying large areas. It has a flight time of up to 120 minutes and a range of up to 15 km.

v. NETRA HYBRID: A hybrid VTOL UAV that combines the advantages of fixed-wing and rotary-wing platforms. It has a flight time of up to 150 minutes and a range of up to 50 km.

vi. Batteries: A range of high-performance lithium polymer batteries for powering the UAVs. They have capacities of up to 22 Ah and voltages of up to 22.2.

vii. Communication Systems: A range of secure and reliable communication systems for controlling and transmitting data from UAVs. They have frequencies of up to 2.4 GHz and bandwidths of up to 10 Mbps.

viii. Drone-related Software and Solutions: A range of software and solutions for planning, executing, analyzing, and managing UAV missions. They include flight control software, mission planning software, data processing software, fleet management software, etc.

Competitve Strengths

i. Diversified product portfolio with a robust technology stack and track record of successful outcomes in critical use cases.
ii. Pioneer and the pre-eminent market leader in the Indian UAS industry, with a first-mover advantage
iii. Strong relationships with a diverse customer base
iv. Significant product development capabilities powering our software and solutions and product differentiators

Objects of the Ideaforge Technology Limited IPO:

The Company proposes to utilize the Net Proceeds towards funding the following objects: 1. Repayment/prepayment of certain indebtedness availed by the Company; 2. Funding working capital requirements; 3. Investment in product development; and 4. General corporate purposes.
DRHP of Ideaforge Technology Limited IPO
RHP of Ideaforge Technology Limited IPO

Ideaforge Technology Limited IPO Details:

Open Date: Jun 26 2023
Close Date: Jun 30 2023
Total Shares: 8437500
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 567 Cr.
Lot Size: 22 Shares
Issue Price: ₹ 638 to ₹672 Per Equity Share
Listing At: NSE,BSE
Listing Date: Jul 07 2023

Promoters And Management:

i. Srikanth Velamakanni is the Chairman and Independent Director of the Company and has been an Independent Director on the Board of the Company since December 14, 2022. He holds degree in bachelor of technology in electrical engineering from Indian Institute of Technology, Delhi and a post-graduate diploma in management from Indian Institute of Management, Ahmedabad. He is associated with Fractal Analytics Private Limited as the co-founder, group chief executive and executive vice chairman. ii. Ankit Mehta is the Chief Executive Officer and Whole-Time Director of the Company. He is a Promoter of the Company. He has been associated with the Company since its incorporation and has experience in the drone industry. In the Company, he is responsible for driving business growth, strategy, global expansion and investor relations. He holds a degree in bachelor of technology in mechanical engineering under the dual degree programme and a degree in master of technology in mechanical engineering with specialization in computer aided design and automation under the dual degree programme from Indian Institute of Technology, Bombay. He received the Young Alumnus Achiever Award from Indian Institute of Technology, Bombay in the year 2020. iii. Rahul Singh is the Vice President-Engineering and Whole-Time Director of the Company. He is a Promoter of the Company. In the Company, he is responsible for driving innovation and for product and technology roadmap. He has been associated with the Company since its incorporation and has experience in the drone industry.

Financials of Ideaforge Technology Limited IPO:

A. Balance Sheet
Particular (In Crore) Mar-21 Mar-22 Mar-23
Equity Share Capital 0.089 0.089 21.337
Reserves 60 163 303
Borrowings 51 6 87
Trade Payables 5 7 14
Other Liabilities 9 46 63
Total Liabilities 64 59 163
Net Block 1 2 8
Capital Work in Progress 0 0 3
Investments 0 0 1
Other Assets 41 76 92
Total NC Assets 42 79 104
Receivables 24 20 58
Inventory 23 49 105
Cash & Bank 5 30 5
Other Assets 29 44 217
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Crore) Mar-21 Mar-22 Mar-23
Sales 35 159 186
Raw Material Cost 22 51 96
Change in Inventory -4 -10 -37
Employee Cost 19 27 51
Other Expenses 8 18 29
Other Income 2 2 10
EBITDA -9 75 57
EBITDA Margin -26.65% 47.12% 30.91%
Depreciation 4 7 12
Interest 2 18 5
Profit before tax -15 50 41
Tax 0.12 6 9
Net profit -15 44 32
C. Cash Flow Statement
Particular (In Crore) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation -5 80 78
Receivable -13 3 -38
Inventory -13 -25 -56
Payable 4 3 7
Other WC Items -4 14 -38
Working Capital Changes -26 -6 -125
Direct Taxes 0.05 -7 -6
Net Cash Inflow from Operating Activity -31 67 -53
Cash from Investing Activity
Fixed assets purchased -9 -13 -33
Fixed assets sold 0 0.02 0
Investments purchased -11 -9 -9
Dividends received 0.14 0 0
Other investing items 13 -8 -107
Net cash inflow from investing activities -7 -31 -149
Cash from Financing Activity
Proceeds from shares 0 0 103
Proceeds from borrowings 0 15 0
Repayment of borrowings 0 -15 0
Intrest paid fin -1 -7 -4
Other financing items 44 -3 78
Net Cash Flow 5 25 -26
 

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
IdeaForge Technology Limited 186 31.9 7.68 87.5 672 2800
MTAR Technologies Limited 573 104 33.84 59.8 2025 6229
Data Patterns India Limited 453 124 22.15 86.2 1,910 10,693
Astra Microwave Products 816 70 8.06 50.4 371 3,520
* All the data is as per FY23.

Recommendation on Ideaforge Technology Limited IPO:

Review and Recommendation of Ideaforge IPO by IZ team is 4/10 1. Market Leadership: Company is a leading player in the Indian Unmanned Aircraft Systems (UAS) market with approximately 50% market share in Fiscal 2022. 2. Versatile Applications: These drones are capable of diverse applications, aiding in mining area planning, mapping, construction and real estate operations, as well as assisting defence forces in ISR operations. 3. Global Recognition: Company is ranked 7th globally in the dual-use category (civil and defence) drone manufacturers as per the report published by Drone Industry Insights. 4. High Growth: Company has grown at a CAGR of 237.48% in terms of revenue from operations over the last three Fiscals, with a Return on Capital Employed of 49.63% in Fiscal 2022. 5. Patent Applications: They have filed 62 patent applications, which comprise of 34 applications filed internationally and 28 patent applications filed in India, as on February 8, 2023. 6. IPO Valuation: The IPO is coming at P/E of 87x which looks highly overpriced. 7. Issue: The issue of Idea forge is a mix of Fresh issue and OFS. The existing investors are looking to exit from the company at very high valuation. 8. GMP: The current grey market premium (GMP) of 480 suggests a strong potential for listing gains. However, for individuals planning to invest in the IPO with the intention of exiting upon listing, it's important to consider the implications. With a GMP of 480, the price-to-earnings ratio (P/E) would be approximately 140x.

Lead Manager of Ideaforge Technology Limited IPO:

  1. IIFL Securities Ltd
  2. JM Financial Consultants Private Limited

Registrar of Ideaforge Technology Limited IPO:

  1. Link Intime India Private Limited

Company Address:

EL-146, TTC Industrial Area, Electronic Zone MIDC, Mahape, Navi Mumbai, Thane 400 710, Maharashtra, India

Discussion on Ideaforge Technology Limited IPO:

10 Comments

    *Listing Ideaforge Technology Limited* on 7 july

    *NSE Symbol:- IDEAFORGE*

    *BSE CODE:- 543932*

    *ISIN NO:- INE349Y01013*

    Reply

    Subscribed more than 100 times. Lottery type allotment? . May not get any. Cyent…. subscribed more than 67 times. Atleast no loss is guaranteed in both.

    Reply

    Expert advice solicited about the others coming up on 30/4/23 and subsequent days.

    Reply

    Applied for one lot each. Oversubscription this afternoon (2nd day) was reported to be more than 13 times.

    Reply

      Agree with you Umesh ji. Hype and valuation are high. Likely to be over subscribed multiple times and if so might be listed on premium. Thinking to apply for one lot each.

      Reply

    Following funds have invested in the Idea Forge Pre-IPO on 7th June 2023

    1. 178,515 equity shares were allotted to ONE Special Opportunities Fund – Series 9 (formerly IIFL Special Opportunities Fund – Series 9).

    2. 44,700 equity shares were allotted to ONE Special Opportunities Fund – Series 10 (formerly IIFL Special Opportunities Fund – Series 10).

    3. 223,214 equity shares were allotted to TATA AIG General Insurance Company Limited.

    4. 223,214 equity shares were allotted to Think Investments PCC.

    5. 223,214 equity shares were allotted to Motilal Oswal Midcap Fund.

    Reply

    Under the guise of excessive drone hype, Idea Forge is being traded at a price-to-earnings (P/E) ratio of 87x, while its peer, Data Pattern, has seen its P/E ratio rise from 48x to 86x in the past five months. Similarly, MTAR is valued at a P/E ratio of 60x, and Astra Micro at 51x. Additionally, the mention of an Offer for Sale (OFS) suggests that the seller intends to capitalize on the drone industry’s upward momentum.

    Reply

      Subscribed more than 100 times. Lottery type allotment? . May not get any. Cyent…. subscribed more than 67 times. Atleast no loss is guaranteed in both.

      Reply

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