Exicom Tele-Systems Limited IPO

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The Company Incorporated in 1994, they are a leading Indian power management solutions provider with a global footprint, specializing in two distinct business verticals:

  1. Critical Power Solutions Business: Their core expertise lies in designing, manufacturing, and servicing DC Power Systems and Li-ion based energy storage solutions. These are aimed at ensuring comprehensive energy management across telecommunications sites and enterprise environments, both domestically and internationally. Their products are pivotal for back-up power during grid interruptions, thereby ensuring energy stability. They hold a significant market share in this segment, with a 16% presence in the DC Power Systems market and a 10% stake in the market for Li-ion Batteries for telecommunications, as of March 31, 2023.
  2. Electric Vehicle (EV) Charger Solutions Business: Pioneering in the EV Chargers manufacturing domain in India, they have successfully established a strong market presence with a 60% and 25% market share in the residential and public charging segments, respectively. Commencing commercial operations in FY 2019, their smart charging systems incorporate innovative technology suitable for residential, business, and public charging applications across India.

Strategic Focus on Sustainable Energy Transition: Their mission is anchored in contributing to the global sustainable energy transition, primarily through the electrification of transportation and enhancing the energy resilience of digital communication infrastructures.

Revenue Streams and Market Position

  • Revenue Diversification: Their revenue model is bifurcated into products and services stemming from both the Critical Power Solutions and EV Charger Solutions business verticals, showcasing a robust and diversified revenue stream.
  • Market Leadership and Innovation: They are recognized for their market leadership in both segments, driven by their commitment to innovation, quality, and sustainability. Their strategic approach to R&D and product development has placed them at the forefront of the power management and EV charging solutions industry.

Growth and Expansion Strategy

  • Global Expansion: Their operational footprint extends beyond India, with strategic expansions in South East Asia, Africa, and other regions, facilitated through the establishment of subsidiaries and a strong global distribution network.
  • Research and Development: A significant emphasis on R&D has enabled them to maintain technological superiority and adapt to evolving market demands. Their dedicated R&D centers in India are at the core of their innovation strategy, focusing on power electronics design, system engineering, and advanced energy solutions.
  • Sustainable and Scalable Manufacturing: Their manufacturing capabilities are vertically integrated, ensuring end-to-end control over the production process. This approach not only enhances their product quality but also allows them to be cost-effective and responsive to market needs.

In conclusion, their business strategy is geared towards leveraging technological innovation to meet the growing demands of the energy management and electric vehicle charging markets, thereby contributing to a sustainable future.

Objects of the Exicom Tele-Systems Limited IPO:

The company proposes to utilize the Net Proceeds towards funding the following objects: i. Part-financing the cost towards setting up production/assembly lines at the planned manufacturing facility in Telangana ii. Repayment/pre-payment, in part or full, of certain borrowings of the company iii. Part-funding incremental working capital requirements iv. Investment in R&D and product development v. General corporate purposes Total number of shares issues :- i. Fresh issues is 23,169,014 shares, ii. Offer for sale is 7,042,200 shares.
DRHP of Exicom Tele-Systems Limited IPO
RHP of Exicom Tele-Systems Limited IPO

Exicom Tele-Systems Limited IPO Details:

Open Date: Feb 27 2024
Close Date: Feb 29 2024
Total Shares: 30,211,214
Face Value: ₹ 10 Per Equity Share
Issue Size: 429.00 Cr.
Lot Size: 100 Shares
Issue Price: ₹ 135 - 142 Per Equity Share
Listing At: NSE,BSE
Listing Date: Mar 05 2024

Promoters And Management:

Anant Nahata is the Managing Director and Chief Executive Officer of the Company. He is also the individual Promoter of the Company. He has been a Director on the Board since June 4, 2008. He holds a bachelor’s degree in arts (economics) from the University of Pennsylvania. He was previously associated with Credit Suisse Securities (USA) LLC sand Koovs Marketing Consulting Private Limited. Vivekanand Kumar is a Whole Time Director of the Company. He has been a Director on the Board since August 21, 2023. He was previously the Vice President – Operations of the Company and has been associated with the Company since January 27, 2021. He holds a bachelor’s degree in technology (production) from the Vinoba Bhave University and a post graduate diploma in business administration from Symbiosis Centre for Distance Learning. He has been previously associated with Autoliv India Private Limited, Hydraulics Limited, Gates India Private Limited, GKN Drive (India) Limited, Caparo Engineering India Private Limited and Roop Automotives Limited. Subhash Chander Rustgi is a Non-Executive Director of the Company. He has been a Director on the Board since September 1, 2015. He holds a bachelor’s degree in science (electrical engineering (electronics) and master’s degree in business administration, from the University of Delhi. He was previously associated with Himachal Futuristic Communications Limited and Bharat Electronics Limited.

Financials of Exicom Tele-Systems Limited IPO:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23
Equity Share Capital 72.30 72.30 72.30
Reserves 2,062 2,143 2,248
Borrowings 1,018 1,077 1,179
Trade Payables 2,925 1,654 2,819
Other Liabilities 708 1,083 733
Total Liabilities 4,650 3,814 4,731
Net Block 670 653 499
Investments 9 9 12
Other Assets 824 1,035 794
Total NC Assets 1,503 1,698 1,305
Receivables 3,281 1,686 3,145
Inventory 1,167 1,361 1,283
Cash & Bank 360 554 519
Other Assets 473 731 799
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Sales 5,129 8,428 7,079
Raw Material Cost 1,818 2,301 3,599
Purchases of Stock In Trade 1,895 4,297 1,530
Change in Inventory 164 -79 49
Other Mfr. Exp 90 118 149
Employee Cost 514 557 645
Other Expenses 353 560 583
Other Income 115 62 155
Depreciation 141 153 165
EBIDTA 410 736 679
EBIDTA Margin 7.99% 8.73% 9.59%
Interest 141 185 190
Profit before tax 128 398 324
Tax 2 94 14
Net profit 127 304 310
NPM (%) 2.42% 3.58% 4.29%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 175 677 497
Receivable -2,231 1,022 -1,401
Inventory 97 -194 78
Payable 1,862 -817 892
Working Capital Changes -272 11 -431
Direct Taxes -38 -127 -40
Net Cash Inflow from Operating Activity -135 560 26
Cash from Investing Activity
Fixed assets purchased -179 -200 -164
Fixed assets sold 0.03 0.47 0.20
Investments purchased -0.79 0 -2
Other investing items -22 97 243
Net cash inflow from investing activities -202 -102 77
Cash from Financing Activity
Proceeds from borrowings 0 76 102
Repayment of borrowings -92 -30 0
Intrest paid fin -144 -153 -194
Other financing items 700 -65 -64
Net Cash Flow 128 287 -52

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Exicom Tele-Systems Limited 708 31 2.56 55.3 142 1,716
Servotech Power Systems Limited 249 11 0.50 156.0 102 2,179
HBL Power Systems Limited 1,369 98 3.56 59.2 506 14,026
* All the data is as per FY23.

Recommendation on Exicom Tele-Systems Limited IPO:

Review and Recommendation of Exicom Tele Systems by IZ team is 5/10 1. Exicom Telecommunications was established in 1994, specializing in the production of power systems, controllers, rectifiers, chargers, and lithium-ion batteries for energy storage solutions. These offerings are integral components of DC power systems. 2. These DC Systems are used in Telecommunications, BTS, Data Centers, and Renewable Hybrid Sites. 3. In 2019, Exicom expanded into the electric vehicle (EV) charging market, offering AC chargers for residential use and DC chargers for public charging stations. The company has secured a 60% market share in residential charging and 25% in public charging infrastructure. 4. Revenue generation for Exicom is predominantly from DC power solutions, contributing to 70% of its earnings, while the remaining 30% comes from the EV charging sector. 5. Exicom's operations are comprehensive, encompassing product development from conception through design, engineering, and prototype testing. The company boasts two R&D centers and three manufacturing facilities located in Solan, Himachal Pradesh, and Gurugram, Haryana. These facilities have a combined annual capacity to produce 12,000 DC power systems; 44,400 AC and DC fast chargers, covering a total area of 134,351.95 sq. ft. Exicom's manufacturing approach includes in-house production of key components, strong vendor relationships, and integrated operations to manage manufacturing costs effectively, enhancing its competitive pricing strategy. 6. As of September 30, 2023, Exicom employs 1,190 individuals, including 443 contract workers and 732 technically qualified staff, comprising 438 diploma holders and 294 engineers. This number also includes 50 employees in its overseas subsidiaries. 7. Committed to innovation, Exicom maintains a dedicated R&D team of 145 members, located in its Gurugram, Haryana, and Bengaluru, Karnataka centers, as of September 30, 2023. 8. Revenue at Exicom Telecommunications has demonstrated a fluctuating trend over the recent fiscal years. Starting at approximately INR 519 Crores in FY21, it saw a significant rise to around INR 840 Crores in FY22, before experiencing a dip to approximately INR 707 Crores in FY23. However, projections for FY24 anticipate an increase in revenue to around INR 900 Crores. Despite these fluctuations, the Compound Annual Growth Rate (CAGR) from FY22 to FY24 stands at a modest 3.51%. 9. In terms of financial performance metrics for FY23, the Return on Capital Employed (ROCE) and Return on Equity (ROE) were recorded at 11% and 13.38%, respectively. These figures indicate a relatively low profitability, with the ROCE falling below the Weighted Average Cost of Capital (WACC) in India. This suggests that Exicom's efficiency in generating profits from its business operations is limited. 10. For the fiscal year 2024, the anticipated total profit stands at approximately INR 60 Crore. With an expected post-IPO share count of around 12 Crore, the earnings per share (EPS) would be approximately INR 5. Given a price-to-earnings (P/E) ratio of 28 times, the company's market capitalization is projected to be INR 1704 Crore. This valuation appears to be within a reasonable range.

Lead Manager of Exicom Tele-Systems Limited IPO:

  1. Monarch Networth Capital Limited
  2. Systematix Corporate Services Limited
  3. Unistone Capital Pvt Ltd

Registrar of Exicom Tele-Systems Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Exicom Tele-Systems Limited 8, Electronics Complex, Chambaghat Solan 173 213 Phone: +91 124 6615 200 Email: investors@exicom.in Website: https://www.exicom.in/

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