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ideaForge: Sky-high Success in the Drone Industry's IPO Race

Created on 26 Jun 2023

Wraps up in 6 Min

Read by 3.6k people

Updated on 07 Oct 2023

Few industries have seen as much growth and innovation in the quick-paced world of technology as the drone industry. As we focus on the most recent buzz in the marketplace, ideaForge's Initial Public Offering (IPO) has dominated the sector. Within the first day of opening for subscription, the IPO became oversubscribed by 3.74 times, leaving investors and industry enthusiasts in wonder. 

In a startling increase, actual numbers for worldwide military spending increased by 3.7 percent in 2022, reaching an all-time high of $2,240 billion. This remarkable accomplishment ilustrates the increased commitment of all nations to defence as they work to protect their interests and strengthen their military forces.

We see the United States, China, Russia, India, and Saudi Arabia leading the charge as the top spenders in this period of martial might. These powerful countries, who were at the forefront of military spending, controlled an astounding 63 percent of global defence spending. Their persistent dedication to enhancing their military might shows their unshakeable commitment to defending their borders and projecting influence internationally.

With the global drone industry was worth $21.1 billion in 2022. The development of drones has completely changed the economics of warfare by allowing low-cost aircraft to effectively counter pricey heavy weapons. India has strategically prioritised modernising its armed forces and gaining self-sufficiency in ammunition manufacture despite continued border tensions with China and Pakistan. For India's military activities, drones are becoming a necessity for surveillance, security, combat, and logistics needs.


This article explores ideaForge's noteworthy path, providing a look at the growing drone market, the company's fundamental business operations, its primary rivals, product portfolio, important financial information, and the fascinating IPO details. So join us as we explore ideaForge.

About the company

Since its founding in 2007, ideaForge has risen to become the market leader and undisputed champion for unmanned aircraft systems ("UAS") in India. They are the fastest growing and most lucrative business, with an amazing market share of over 50% in FY22. The company's pioneering founders laid the foundation for their unparalleled success by building one of India's first quadrotor drones for a college festival in 2004.

Notably, ideaForge was the first company in India to design and produce Vertical Take-off and Landing (VTOL) UAVs in 2009. Due to their early introduction into the UAV market and first-mover advantage, they were able to deploy the most operational UAVs across India compared to its competitors. 

ideaForge is the largest drone producer in India as of September 2022.

They have established themselves as a reliable partner for defence and homeland applications thanks to their remarkable design and technological capabilities and vertically integrated operations. The company's accomplishments go beyond business:

  • They have deployed over 1,000 systems
  • Obtained over 20 patents, and 
  • Educated over 3,000 pilots in the military and government agencies

Their commitment to innovation has received recognition on a global scale; their co-founder Ashish Bhat was named to the Massachusetts Institute of Technology's "Technology Review list of 35 Innovators under 35" and won the prestigious award for "Best Autonomous Hovering Vehicle" in 2010.
Their reputation as innovators endures unaltered as they continue to revolutionise the UAS sector and advance India's technological prowess.

Profit Generation and Business Operations: ideaForge's cutting-edge drone sales and related services account for the majority of the company's revenue. The company's primary business activities centre on developing and producing reliable, cutting-edge UAV systems that are suited to the individual requirements of its clients. ideaForge has constantly advanced drone technology by putting a major emphasis on research and development, guaranteeing that its products provide unmatched performance, dependability, and safety. Let us now look at their wide range of Udankhatola’s that they manufacture.

Product Portfolio

ideaForge is a pioneer in both civil and defence applications thanks to their wide selection of UAVs created for different uses. Their amazing product line includes anything from small, light drones used for high-resolution mapping to drones with HD cameras and megaphones for surveillance and public address. ideaForge drones have cutting-edge technical capabilities that allow them to fly up to 15 kilometres, can sustain flight for 120 minutes, and function at 1,000 metre heights. Additionally, their unique energy management technology guarantees a longer battery life, improving the effectiveness of UAV operations.

ideaForge was one of the first UAV manufacturers to acquire BIS certification for their internally developed batteries, making them leaders in the field.

Broadly we can classify the products into the following categories:
- Hardware which primarily includes UAVs, payloads, batteries,chargers and communication system.
- Software and embedded sub-systems, which includes the GCS software and autopilot sub-system
- Solutions

Drone market in India

India is embracing UAV technology's potential in a variety of industries because of the country's need to keep up with rising demand and international standards. As they realise the full potential of drones in both military and civilian uses, the nation's strategy is all about innovation, experimentation, and exploration. Drones are being used in the civic sphere in industries like law enforcement, media, disaster management, mapping, and agriculture. The drone market in India is expected to reach $2.71 billion in 2022 and is currently growing quickly.

The needs and options are continually changing because the drone business is still in its infancy. 

India is well-positioned to transform sectors with this exciting technological development, making routine tasks more effective, secure, and contemporary. As drones soar into the future and revolutionise numerous industries with their seemingly endless potential, the sky is the limit.

Key Financials

It's crucial to address the issues affecting the company's success within the umbrella of major financials. They have reported losses for Fiscal 2020 and 2021, and the reason for it in 2020 was flat income and the impact that UAV rules had on the sector. Moving into Fiscal 2021, flat revenue again, the continuing effects of UAV rules, and the unexpected difficulties brought on by the COVID-19 pandemic increased the losses.

(₹million)

2020

2021

2022

Income

163.22

363.35

1614.48

PAT

-134.46

-146.26

440.06


It's crucial to remember that rising costs, expenses, and investments could pose problems for the company. These elements have the potential to lower their margins and could significantly harm the overall operations, financial situation, and company performance. 

It is important to keep a close look at these figures. 

Operating revenue grew at a CAGR of 236% between FY20 and FY22, while EBITDA changed its negative trend from ₹(101.91) to ₹751.31 during that time.

Where will the funds raised be utilised?

The allocated funds will serve several purposes. First and foremost, they will be used to pay off outstanding debts, lowering financial responsibilities and strengthening the financial position of the business. Additionally, the cash will be used to meet the need for working capital, assuring efficient operations and regular operation. Another crucial factor is investing in product development, which enables innovation and enhancement of our offers in response to changing consumer expectations. The money will also be used for general business objectives, giving the company flexibility and support for a range of operating requirements. This all-encompassing strategy guarantees that the funds are strategically used to strengthen the business in various areas and promote sustainable growth.

IPO details

IPO Date June 26th, 2023 to June 29th,2023
Face Value ₹10 per share
Price Band ₹638 to ₹672 per share
Lot Size 22 shares
IPO Size ₹567 crore


The Bottom Line

The final say on whether or not to invest in ideaForge rests with you. To your advantage, we have included the necessary details about the business. ideaForge has established itself as a major player thanks to its tremendous rise in the drone market, as well as their impressive product range, financial data, and exciting IPO. ideaForge is a leader in technological prowess and creativity as India embraces the possibilities of drones and they revolutionise numerous industries. There is no ceiling on how high you can go! Invest wisely!

*Disclaimer: The stock discussed above aren't recommendations from Finology, and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making an investment decisions.

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Sakshi Dhakre

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Sakshi is an adventurous spirit who enjoys both the intellectual stimulation of Finance and the sensory experiences of good food and nature’s beauty. She has a passion for delving into complex financial topics and distilling them down into easy-to-understand insights. When she's not poring over financial reports, you might find her exploring a new corner of the city, trying out new restaurants and cuisines or admiring the beauty of the night sky.

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