ideaForge Tech IPO opens on June 26; price band fixed at ₹638-672

Drone manufacturing company ideaForge Technology will open its initial public offering for subscription on June 26, 2023. The company has set a price band of ₹638-672 apiece for the public issue, its red herring prospectus filed with SEBI (Securities and Exchange Board of India) shows.

The issue will close on June 29, 2023, while the anchor book will be open for a day on June 23, 2023.

The public offer comprises a fresh issue by the company and an offer for sale by the selling shareholders. The overall issue comprises fresh issuance of shares worth ₹240 crore, and an offer for sale of 48.69 lakh equity shares by selling shareholders. A total of 13,112 shares have been reserved for employees.

The unmanned aircraft systems manufacturer is expected to raise around ₹567 crore as per the upper price band.

The company, in consultation with the BRLMs, had also undertaken a pre-IPO placement worth ₹60 crore, which is why the size of the fresh issue of up to ₹300 crore has been reduced by ₹60 crore and accordingly, the revised size of the fresh issue is up to ₹240 crore.

The company said the shares will be allotted on July 4, 2023, and will list on the exchanges on July 7, 2023. The company will initiate refunds for those who’ll not receive the shares on July 5, 2023.

ideaForge Technology's total assets as of March 31, 2022, stood at ₹487.9 crore. The consolidated financials show it recorded a profit worth ₹40.7 crore as of March 31, 2023, and its income stood at ₹196.4 crore.

Ankit Mehta, Rahul Singh, and Ashish Bhat are the promoters of the company. The promoters, who are also equity shareholders, hold in aggregate 10,817,264 shares, which constitutes 28.39% of the issued, subscribed, and paid-up equity share capital of the company.

Florintree Enterprise, Celesta Capital II Mauritius, and Ankit Mehta are the biggest shareholders in the company, with 12.13%, 11.69%, and 9.73% stakes, respectively.

The company said it aims to deploy the net proceeds from the issue to repay or prepay certain indebtedness, fund the working capital gap, invest in product development, and general corporate purposes.

ideaForge claims to be a “pioneer and the pre-eminent market leader” in the Indian unmanned aircraft systems market, with a market share of around 50% in fiscal 2022, as per the 1Lattice report.

Its product portfolio consists of hardware, which primarily includes UAVs, payloads, batteries, chargers, and communication systems; and software and embedded sub-systems, which include the GCS software and autopilot sub-system and solutions. The company primarily caters to customers with applications for surveillance, mapping, and surveying.

Notably, the global drone industry is estimated to be worth $21.1 billion in 2022, the report says. The industry has witnessed significant growth at a CAGR of 19% over 2018-2022 and is expected to grow even faster at a CAGR of 20% to be around $51.4 billion in 2027 and further leap to around $91.3 billion by 2030. As of 2022, says the report, the potential market size for the Indian drone industry was around $2.71 billion.