Introduction
Idea Forge Technology is a technology-driven drone solutions company based in India. Having already raised 60 odd crore rupees in a pre-ipo round, Idea Forge is now making its debut in the equity exchange market with an IPO. The company aims to raise 567 crore rupees from this IPO, consisting of both a fresh issue and an offer for sale.
In today’s highly competitive business landscape, companies are tasked to look for innovative ways to attract and retain top talent. One of the most practical and proven strategies is to provide employees with ownership shares. This approach is seen as a win-win proposition since it not only empowers the employees, but it also aligns their interests with that of the company. In this article, we will delve deeper into this revolutionary approach by examining a company that has adopted it.
As technology continues to evolve at an unprecedented rate, businesses are searching for ways to keep up. One company at the forefront of this technological revolution is X Tech, a company that has been developing ground-breaking technologies for the past 16 years. With their upcoming IPO, investors are eager to learn more about the company’s financial prospects and their plans for manufacturing and expansion.
The drone industry is currently experiencing a significant growth spurt with investors and governments pouring large sums of money into drone technology. Various industries have started to adopt and integrate the use of drones into their operations, leveraging the benefits it offers to increase productivity, efficiency, and affordability. This article will look at some of the exciting opportunities that lie ahead for organizations in the drone industry.
The stock market is constantly evolving, and investors are always on the lookout for the latest opportunities to make profits. One of the most exciting times in the stock market is during an initial public offering (IPO), when a company goes public for the first time. Investors around the world are buzzing with excitement about the latest IPOs, and experts predict that this trend will continue in the near future.
The Price Plan
The company has fixed a price plan for the IPO, ranging from 638 to 672 rupees for equity share. The IPO closes on June 29th, with the anchor book being launched on June 23rd for a day.
The Structure of the IPO
The Idea Forge Technology IPO consists of a fresh issue of 240 crore rupees and an offer for sale of 48.69 lakh equity shares worth about 327 crore rupees by the promoters and investors.
The Pre-IPO Journey
What started off as a college project for the CEO of the firm, Mr. Ankit Mehta, back in IIT Bombay, has now become a burgeoning business. A journey that has taken him from the humble beginnings of a college project to foraying into the listed space of equity exchanges.
Insights and Expectations
Joining the top management to discuss more insights on the IPO are Mr. Ankit Mehta and Mr. Vipul Roshi, CEO of Idea Forge Technology. With regards to the IPO, the company is expecting to expand its operations, invest in research and development, and allocate funds for general corporate purposes.
Playing with Technology
After spending a few years playing with the technology and building it in the back end, they got the chance to participate alongside IIT Bombay in some competitions. Helping IIT Bombay secure pool position in those competitions allowed them to showcase their technology capability.
From Drone Parts to Building Drones
Their journey in building and delivering drone parts started after collaborating with DRDO Labs. This led them to start their operations in 2007 and eventually building their own drones. However, their journey was not all smooth sailing.
2008 Mumbai Attacks
In 2008, when the attacks happened on Mumbai, there were reports of helicopters being used to look into the third and fourth floor of the Taj Hotel. This incident led to strict regulations regarding drones and the usage of drones in India.
The Future Vision
Despite the challenges, the future vision is bright for this company. They aim to continue innovating and building cutting-edge technology for drones and expanding their operations globally. Their journey has been surreal, and they hope to continue growing and making an impact in the drone industry.
From a fun project to building innovative drones, the journey has been incredible so far. The team faced different challenges along the way, but they persisted and continued to innovate. Their future vision is exciting, and we can expect to see great things from them.
The Beginning of a Journey
When we see drones hovering over our heads, we often wonder about the purpose of their existence. However, drones have come a long way since their inception. The story of drones in India began as a potential solution for security purposes. The idea of creating technology for security use cases acted as a catalyst for the drone industry’s progress. The journey was not easy, but it was a vision that aimed at improving the country’s security.
From Prototype to Product
In 2009, a group of individuals turned their idea into reality and launched their own drone product. This product was not only revolutionary but also a source of inspiration for many. You might not know this, but one of their early prototypes was featured in the movie “Three Idiots.” This was a significant step in bringing the concept of drones to the general public. Since then, their drones have flown over three and a half lakhs flights, serving a variety of use cases, including surveillance and mapping.
The Importance of Surveillance and Mapping
In today’s world, surveillance is a critical aspect of security. With the rise in crime, anti-social activities, terrorist threats, and natural calamities, drones have become a necessary tool for authorities to keep an eye on everything. Drones can quickly cover vast areas and feed critical information back to the operators in real-time. With mapping, drones can create 2D/3D maps covering vast landscapes that take less time and effort from collecting data on the ground. This information helps in assessing natural calamities, urban planning, and other crucial decision-making processes.
The Future of the Drone Industry
Drones have come a long way since their inception, and the industry is experiencing significant growth. The drone market is expected to be worth US$21.5 billion by 2022. This technology has immense potential for not only improving security but also contributing to several other areas like agriculture, construction, transportation, and more. With the adoption of advanced technologies like AI and IoT, drones will continue to revolutionize the industry.
Launching the IPO and Future Plans
The drone industry in India has immense potential, and companies are taking significant strides to take advantage of this opportunity. The key objective of launching an IPO is to raise funds to fuel innovation and growth. The current funds from the fresh issue will help in expanding the product line, increasing production capacity, and enhancing the sales and marketing efforts. The future of the drone industry is bright, and it is an exciting space to be in. The possibilities are endless, and this industry will undoubtedly contribute towards a better world.
Security is an ever-evolving issue, and the integration of drones in surveillance and mapping has significantly advanced the country’s security. Drones are not just a tool, but a revolution that has transformed the industry. The drone industry has enormous potential, and with continued growth and development, it will change the world we live in for the better.
Allocation of Funds
A crucial element of a company’s financial plan is how they allocate their funds. In this case, the company plans to raise funds for their expenses by distributing between product development, recruitment of debt, and working capital. Out of the total amount, 40 crores are for product development, 50 crores for recruitment, and 135 crores for working capital.
Debt to Equity Ratio
Investors often look at the debt to equity ratio before investing in a company. When asked about the debt to equity ratio, the company responded by stating that it was a debt-free organization for most of its life. They plan on using their debt by investing in expansions once they repay their current debt utilization, which amounts to 85 crores, and then repairing the 50 crores. As the business grows, they plan on dipping into the requirement from the debt and using the fresh raise if needed.
Shareholding Structure
It is important to understand who all are selling stakes as part of the company’s offer for sale (OFS) in this initial public offering (IPO) as it may impact the company’s shareholding structure. The company stated that around 13% of their overall shareholding is currently in the OFS. Some long-term investors who have already invested in the company would be taking only partial exits as part of the IPO.
Final Thoughts
Before investing in a company, reviewing the company’s financial plan is crucial. In this case, the company plans to allocate funds towards product development, recruitment of debt, and working capital. The company is also planning to use debt strategically by investing in expansions once they repay their current utilization. Finally, it is important to understand the shareholding structure before investing. While some long-term investors would be taking only partial exits, understanding how their stake will impact the company is important.
Reserved Shares for Employees
The company we’re talking about is a technology firm that has been in operation for the past 16 years. In a recent interview, the founder mentioned that they had reserved 13,000 shares for their employees. According to him, the decision came from the realization that the company’s growth is largely attributed to the dedication and commitment of its employees. He also added that providing employees with ownership shares is a way of saying thank you and showing appreciation for their hard work.
The Benefits of Employee Ownership
Employee ownership has several benefits. One of the most significant advantages is that it aligns the interests of the employees with that of the company. When employees have shares in the company, they are more motivated to work harder and to make the organization successful. Also, employee ownership often leads to higher job satisfaction, better retention rates, and increased loyalty.
Current Clients and Order Book
During the interview, the interviewer asked the founder about the company’s key clients and order book. According to him, the company’s technology has been deployed by various defense forces, central armed police forces, state police forces, government departments, and private enterprises. The company’s technology is primarily used for surveillance and mapping applications.
In terms of the order book, the founder mentioned that the FY 23 ending order book was about 192 crores. He also added that the company is currently participating in several opportunities, which he believes will contribute to the company’s growth going forward.
The Future of India’s Drone Sector
With the Indian government’s intention to deploy technology and the opening up of regulations for civilian users, the country’s drone industry is looking for exciting growth opportunities. While India’s drone technology is starting from a low base, the sector is expected to experience rapid growth in the near term.
Revenue Streams for Drone Technology Developers
While the drone sector offers potential growth opportunities, developers in the space focus largely on defense and civil defense markets, with 75 to 80 percent of portfolios. Going forward, the ratio should remain consistent, with a slight betterment in the civil market. As for revenue streams, FY 22 market share for idea Forge is expected to reach 50% market share in terms of revenue.
Building Revenues in the Drone Industry
While drone technology developers rely on defense and civil defense markets, there is potential for growth in other areas. The drone industry is evolving and has the potential to service sectors beyond military and government organizations. For drone technology developers, the key focus should be on diversifying revenue streams for stable and sustainable growth.
The Future of the Drone Industry in India
The drone industry in India shows promise for steep growth. Drone technology developers must focus on creating a sustainable and diverse revenue stream to reap the full benefits of the growing industry. The government’s role in promoting the technology and opening regulations to civilian users is expected to bolster growth for the sector in the coming years.
Sustained Growth and High Margins
X Tech has consistently pushed the boundaries of technology and brought new models to the market. This has led to sustained growth and high margins that are considerably higher than their peers.
However, investors are questioning whether these high margins will be sustainable after the company goes public. X Tech’s main forte has been the development of technology, and they plan to continue investing in tech to maintain and improve these margins.
Establishing Manufacturing Hubs
Once fundraising is complete, X Tech plans to establish their manufacturing hubs in Navi Mumbai. In the short term, the company plans to stay in this area. Looking to the future, however, X Tech has visibility of going across borders.
Expansion Plans
While the company has achieved great success in India, X Tech is looking to expand globally. With their unique technology and market positioning, the company is confident that they can replicate their success in other parts of the world. Their expansion plans include reaching new audiences and developing new products.
Expanding International Markets
One of the primary driving forces that is propelling the growth of the drone industry is the expansion of international markets. Organizations are exploring new territories and investing in opportunities across the globe. A notable example is the North American Market, where organizations are creating local presence and utilizing the gains they have from technology to create more demonstrations. We are also seeing India’s Prime Minister Modi visiting the United States, signaling unfolding opportunities in the defense space through signed deals.
Implementation of Innovative Plis Schemes
The Indian government, for example, is taking the drone industry more seriously and has implemented innovative plis schemes to give more impetus to investments and manufacturing. These schemes include exemptions from certain taxes and duties, providing credit-linked capital investments, and facilitating export infrastructures. Such schemes provide excellent opportunities for local and international organizations to invest and manufacture drone technologies in India.
Revolutionizing Industries
The drone industry is revolutionizing several industries, including agriculture, mining, entertainment, security, and delivery services. In the agriculture sector, drones are being used to monitor crop growth, reduce wastage, and identify water-logging and nutrient deficiency. In mining, drones are being used to safely survey vast areas and create 3D maps, while entertainment companies are implementing drones for light displays and aerial filming. Delivery companies are also exploring the use of drones to deliver small packages to remote locations.
Advancements in Drone Technology
Researchers and drone manufacturers are creating and testing drone technologies that will shape the future of the industry. With the advent of artificial intelligence, drones can be made smarter to perform more complex tasks such as autonomous navigation, obstacle detection, and path planning. Additionally, we will witness an increase in battery life and cutting-edge camera technology that can capture high-quality images and videos, creating endless possibilities for aerial photography and videography.
As the geopolitical situations globally create a need for alternative geographies of delivery of drone technology, there is a great opportunity for businesses in the drone space. From civil uses to defense users, the need for drones is becoming ubiquitous. This scenario creates an excellent opportunity for companies to capitalise on.
Furthermore, there are emerging trends globally that require the use of drone technology. This means that the drone industry will keep growing as demand does. With the growth of the drone industry, there is a massive opportunity to expand and capture new markets, leading to a healthy return on investment in the process.
Civil and Defense Markets
The drone market has two prominent categories civil and defense. While both markets have their unique demands, the civil side of the market is currently the most significant growth opportunity. The international market has seen a lot of Defense-related queries about drones in recent times, opening a new avenue for businesses to explore.
The potential civil applications of drones are vast and extend to areas like surveillance, agriculture, media, and delivery services. Therefore, it requires businesses to diversify into many areas to sustain growth.
Drone Industry in India
India has started taking interest in the drone market, as evidenced by its ban on drone imports. This new development has pushed the local drone industry to increase its contribution to the technology. The Indian government has also implemented the PLI scheme, aimed at driving local drone industry growth.
India has a vast potential market for drones, and the country’s drone industry’s contribution to the economy is expected to be significant. Therefore, businesses operating in the drone industry should explore the opportunities available in the Indian market.
The Benefits of an IPO
Going public brings many benefits to a company. It provides access to a much larger pool of capital, which can be used to fund expansion and growth. It also creates a path for employees to own shares and benefit from the company’s success. Finally, it provides a public market that can increase brand exposure and credibility for the company.
The Challenges of an IPO
While an IPO can bring great benefits, it can also be a complicated and challenging process. Preparing for an IPO can be time-consuming and expensive, with many regulatory and compliance requirements to meet. Once the IPO is complete, the company must also deal with increased scrutiny and accountability from the public and investors.
The Latest IPOs to Watch
Investors are always on the lookout for the latest IPO opportunities. In recent months, companies like Roblox, Bumble, and Coinbase have gone public with great success. These companies have seen incredible growth in their stock prices in the weeks and months following their IPOs, creating great opportunities for investors to profit.
The Future of the IPO Market
Experts predict that the IPO market will continue to be a hot topic in the near future. With so many companies looking to go public and investors eager for the latest opportunities, the market is sure to remain active and competitive. The rise of technology and digital platforms is also expected to play a major role in the future of IPOs, as more companies look to leverage these tools to reach a wider audience and attract new investors.
Idea Forge Technology’s IPO has been structured to offer both a fresh issue and an offer for sale. The company aims to raise 567 crore rupees from this IPO. With a fresh issue of 240 crore rupees, Idea Forge Technology is poised to grow its operations, research and development, and invest in general corporate purposes.
Employee ownership is a revolutionary approach that benefits both the company and its employees. It aligns the interests of the employees with that of the organization, leading to increased motivation and loyalty. It’s essential to note that employee ownership is not a one-size-fits-all approach. Companies need to evaluate their goals, culture, and financial position before making a decision. Nevertheless, companies that adopt this approach are reaping the rewards and achieving significant milestones.
X Tech is poised for success, with their unique technology and steadfast commitment to pushing the boundaries of what’s possible. As the company prepares for their IPO and looks towards expansion, investors would be wise to pay attention to this pioneering force in the world of technology and manufacturing.
The drone industry is experiencing tremendous growth, with potential opportunities for international and local organizations. With the implementation of innovative plis schemes, advancements in drone technology, and the exploration of new frontiers, there are limitless possibilities for organizations in the industry. Organizations that adapt and integrate drone technology into their operations will undoubtedly have a competitive edge in the market.
Overall, the IPO market is an exciting space to be in at this point in time. While there are challenges and risks involved, the potential benefits and opportunities for profit are too great to ignore. Whether you are an experienced investor or just starting out, there are plenty of reasons to keep an eye on the latest IPOs and take advantage of the exciting opportunities they offer.
