IPO Note : Idea Forge Technology Ltd By Nirmal Bang Ltd
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BACKGROUND
Idea Forge is a Mumbai-based, vertically integrated firm, which designs and manufactures drones for mapping, security and surveillance applications. It is the market leader in the Indian unmanned aircraft systems (“UAS”) market, with a market share of 50% in FY22. It has been ranked seventh globally in the dual-use category (civil and defense) drone manufacturers.
Objects and Details of the Issue:
The public issue consists of Offer for sale aggregating upto Rs 327 Cr and fresh issue of equity shares aggregating upto Rs 240 Cr. The company proposes to utilise the Net Proceeds from the fresh issue towards repayment/prepayment of indebtedness, funding working capital requirements, investment in product development and general corporate purposes.
Investment Rationale:
* Indian drone market is expected to grow at a CAGR of 80% by FY27
* Significant barriers to entry
* Investment in product innovation, engineering and design
* Strong relationship with customers
* Strong and consistent financial performance
Valuation and Recommendation:-
ITL being the pioneer and market leader with 50% market share is ideally positioned to benefit from this huge growth in the drone industry. ITL’s growth and margin are superior to listed defence companies. ITL’s valuation appears reasonably attractive considering its leadership position and future growth opportunities in the niche industry of drones. Thus we recommend to Subscribe to the IPO
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