Exicom Tele-Systems may launch IPO likely by Feb end; to be first India EV charging co to get listed

Exicom Tele-Systems was amongst the first entrants in the EV chargers manufacturing segment

EV charger manufacturer, Exicom Tele-Systems may go public by the end of February 2024. The price band for the issue could be around Rs 140-145 per share implying a post-listing market capitalisation of Rs 1,750 crore, reported CNBCTV18 citing sources.

Exicom Tele-Systems is a power management solutions provider. It operates under two business verticals - the EV chargers business, where it provides smart charging systems for residential, business, and public charging use in India.

The other one is the critical power solutions business, wherein it designs, manufactures, and services critical digital infrastructure technology to deliver overall energy management at telecommunications sites and enterprise environments in India and overseas.

The company was amongst the first entrants in the EV chargers manufacturing segment. As of March 31, 2023, it had a market share of 60 percent and 25 percent in the residential and public charging segments and further, it has deployed over 35,000 EV chargers across 400 locations in India.

HFCL has a 7.74 percent stake in Exicom Tele-Systems. NextWave Communications, Satellite Finance and Vinsan Brothers hold a 76.55 percent, 4.64 percent and 4.35 percent stake in the company, respectively

On the financial front, the company’s revenue from operations dipped 16 percent to Rs 707.93 crore in FY23, while profit after tax grew 24 percent to Rs 6.37 crore compared to the year-ago period.

RoCE came down to 10.92 percent in FY23 from 17.66 percent in FY22. In FY23, overseas customers contributed 8.79 percent to total revenue from operations.

The revenue from the CPS business dipped to 68.33 percent in FY23 from 91.56 percent in FY22. While revenue from the EV charger business rose to 31.67 percent from 8.44 percent in the same period.

The Indian EV industry is one of the fastest-growing markets in the world and EV stocks have been surging after Finance Minister Nirmala Sitharaman highlighted the government's plan to expand the EV ecosystem in the country.

"We will expand the EV ecosystem by encouraging the adoption of electric mobility in the public transport sector", the minister said while delivering the interim Budget on February 1.

As per the CRISIL report, EV penetration is expected to grow across vehicle segments - two-wheelers, three-wheelers, passenger vehicles, buses, and commercial vehicles.

The EV PV and bus market is estimated to grow by nine times between the financial year ended March 31, 2023, and the financial year ended March 31, 2028, at a CAGR of 50-60 percent with 8-10 percent EV penetration, while the electric bus market is estimated to achieve penetration of 14-16 percent.

To keep things smooth and running, the EV charging network needs to be ramped up, which presents an opportunity for EV charging products with a projected total addressable market of Rs 86 billion by FY28.

Globally, according to CRISIL, the EV charging market for public chargers is projected to grow from an estimated 2.61 million units in 2022 to 16.39 million units by 2027, at a CAGR of 44.40 percent.

There is a growing focus on expanding the charging infrastructure network across India as public charging stations are being installed in cities, highways, and commercial areas, and the adoption of fast charging technologies, such as DC fast charging, is increasing.

By designing and manufacturing EV Chargers for residential, business, and public use, Exicom Tele-Systems aims to provide products to lay the infrastructure required to meet the demands of growing EV ownership in India.

The customers of Exicom Tele-Systems’ EV charger business include national CPOs such as Reliance BP Mobility Limited (JioBP) and Fortum Charge & Drive India, fleet aggregators such as BluSmart Mobility and Lithium Urban Technologies, and automotive OEMs such as Mahindra & Mahindra, MG Motors and JBM.

The company currently caters mostly to the requirements of the Indian market but is planning to expand its customer base to overseas markets in the EV charger business, capitalising on the growing EV adoption in Southeast Asia and Europe, and has already started setting up local sales and distribution networks in such regions.

The company operates three manufacturing facilities in India, comprising Solan Facility situated at Solan, Himachal Pradesh, and Gurugram Facility I and Gurugram Facility II situated at Gurugram, Haryana.

Exicom Tele-Systems plans to use the funds raised through the IPO towards setting up a manufacturing facility in Telangana, repaying borrowings, investing in its state-of-the-art R&D facility, and meeting working capital requirements.