Exicom Tele-Systems IPO: 10 things to know before subscribing to the Rs 429-cr issue

The price band for the issue has been fixed at Rs 135-142 per share.

Exicom Tele-Systems Limited's initial public offering (IPO) is a book-built issue of Rs 429 crore. The offer will open for subscription on February 27 and the anchor book will open on February 26. The public offer comprises a fresh issue of 2.32 crore shares worth Rs 329 crore and an offer-for-sale of 70 lakh shares aggregating to Rs 100 crore.

Here are the key details of the issue

1) IPO Dates

The IPO will open for subscription on February 27 and close on February 29.

2) Price Band

The price band for the issue has been fixed at Rs 135-142 per share.

3) Offer Details

The EV charging company aims to raise Rs 429 crore from the issue.  NextWave Communications, Satellite Finance and Vinsan Brothers hold a 76.55 percent, 4.64 percent and 4.35 percent stake in the company, respectively. HFCL has a 7.74 percent stake in the company.

4) Objectives of the Issue

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. The rest of the proceeds will be set aside for general corporate purposes.

5) Lot Size

Investors can bid for a minimum of 100 equity shares and in multiples thereof. Hence the minimum investment by retail investors would be Rs 13,500 (100 (Lot size) x 135 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,200.

6) Company Profile

Exicom Tele-Systems operates as a power management solutions provider with two primary business verticals. Firstly, in the EV chargers business, the company offers smart charging systems for residential, business, and public charging applications in India.

Secondly, in the critical power solutions business, the company specializes in designing, manufacturing, and servicing critical digital infrastructure technology. This technology is geared towards ensuring comprehensive energy management at telecommunications sites and enterprise environments, both in India and internationally.

7) Financials of the company

On the financial side, Exicom Tele-Systems witnessed a 16 percent decline in revenue from operations, totalling Rs 707.93 crore in the fiscal year 2022-2023. However, the profit after tax showed positive growth, increasing by 24 percent to reach Rs 6.37 crore compared to the corresponding period in the previous year.

Furthermore, there was a shift in revenue distribution between the critical power solutions (CPS) business and the EV charger business. The revenue from the CPS business decreased to 68.33 percent in FY23 from 91.56 percent in FY22. Conversely, the revenue from the EV charger business increased to 31.67 percent from 8.44 percent during the same period.

8) Lead Managers

Monarch Networth Capital Ltd, Unistone Capital Pvt Ltd and Systematix Corporate Services Limited are the book-running lead managers of the Exicom Tele-Systems IPO, while Link Intime India Private Ltd is the registrar for the issue.

9) Key Risks

i.) Exicom is dependent on global suppliers for raw materials and key inputs and may not be able to reduce dependency on such imports. If critical components become scarce or unavailable, then it may incur delays in the manufacturing and delivery of products.

ii.) The company outsources certain operations of its business such as installation, commissioning and maintenance of installed products and other processes to third parties. Any failure by such third parties to deliver their services could have an adverse impact on business and the results of operations.

iii.) Exicom is subject to transfer pricing regulations in respect of transactions with its foreign subsidiaries. If the income tax authorities review its tax returns and determine that the transfer price applied was not appropriate, the company may incur increased tax liabilities, including accrued interest and penalties.

10) Listing Date

Exicom Tele-Systems IPO will likely list on BSE and NSE with a tentative listing date fixed as Tuesday, March 5, 2024.