A larger quantum of payout on employee stock ownership plan (ESOP) for FY23 weighed on the margins of unmanned aerial vehicle maker Ideaforge Technology. In a conversation with Moneycontrol, Chief Financial Officer (CFO) Vipul Shah said that this is expected to fall.
The company's margins dropped from 51 percent in FY22 to 46 percent in FY23. Ahead of its listing, scheduled for July 7, the management refrained from providing any specific guidance.
From a balance-sheet perspective, the company aims to reduce working capital days from 300 to 200 within the next year, and improve inventory days.
Niche market
The company anticipates that it will not grow at the same pace as the Indian drone industry, which is expected to grow at least 18 times over the next five years. This is because the company does not plan to venture into the consumer and agri-spray drone segments.
The CFO stated that the focus will be on tactical drones, middle-mile category drones and last-mile category drones.
In terms of market projections, the Indian drone market is expected to reach $812 million in FY27, compared to $12 million in FY21, according to an Ideaforge presentation. CEO Ankit Mehta highlighted that in FY22, the Indian drone market generated revenues of $43 million, against $20 billion witnessed by the global drone market in FY22.
Way forward
The company intends to expand into international markets, particularly North America. It has already opened a subsidiary in “North America” and is actively conducting demonstrations in the region.
The management also emphasised the regulatory advantages, such as import bans, production-linked incentive schemes and the Directorate General of Foreign Trade opening up exports of drones for civil uses, which have facilitated the transition from drones being considered good-to-have technology to must-have technology.
IPO fully subscribed The company’s Rs 567-crore-initial public offering (IPO) began on a strong note on June 26, being subscribed 2.97 times on the first day. The company has announced it will sell shares in the price band of Rs 638-672 apiece during the three-day sale. The IPO received 1,35,95,406 bids against the issue size of 46,48,870 shares as of 3.51 pm on the BSE.
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