Ahead of IPO, ideaForge secures over $30 Mn from anchor investors

Drone manufacturing company, ideaForge has raised Rs 255 crore or $31 million from anchor investors. The development took place just four days after the company filed its Red Herring Prospectus (RHP) with market regulator SEBI to raise Rs 570 crore from the public market.

The IPO committee of ideaForge in consultation with JM Financial and IIFL Securities (BRLMs) has allocated 37,92,894 equity shares at an issue price of Rs 672 per share to raise Rs 254.88 crore, as per the circular uploaded on the website of Bombay Stock Exchange.

The funding round saw participation from Nomura Funds, TATA AIG, Ashoka India, Mirae Asset, HDFC, Motilal Oswal, 360 One, and Goldman Sachs among other anchor investors. Twelve mutual funds such as Axis Mutual Fund, ICICI Prudential Mutual Fund, HDFC, Aditya Birla Sun Life et al via a total of 18 schemes, also took part in the round.

Few days back, the drone startup raised a pre-IPO round of Rs 60 crore from Motilal Oswal Mutual Fund, Think Investments PCC, 360 One Asset Management and Tata AIG General Insurance. Following the round, the company was valued at around Rs 2,560 crore (~$310 million).

ideaForge previously has raised around $40 million including a $20 million worth Series B round led by Florintree Enterprise in April 2022.

The company’s IPO consists of Rs 240 crore while issuing 48,69,712 equity shares, aggregating a sum of around Rs 327 crore through an offer for sale. The offer period of the IPO will open from 26th June to 29th June 2023 with a price band of Rs 638-672. As per the indicative post issue timeline, 7th July 2023 will be the listing date of the company.

Out of the total fresh proceeds from the public, Rs 135 crore will be used towards filling the working capital gap, further Rs 50 crore for the payment of debts, Rs 40 crore for product development and the rest for other corporate purposes.

Also Read: Decoding Red Herring Prospectus of ideaForge

Founded in 2007, ideaForge focused on providing advanced unmanned aerial vehicle (UAV) solutions. It designs, manufactures, and supplies UAVs along with associated hardware components such as payloads, batteries, chargers, and communication systems. The company also offers software and embedded sub-systems that enable industry-specific applications.

ideaForge’s revenue from operations surged 16.7% to Rs 186 crore in FY23 from Rs 159.4 crore in FY22. As per Fintrackr’s analysis, its profits shrank 27.3% to Rs 32 crore in FY23 as compared to Rs 44 crore in FY22. Significantly, the firm recorded a loss of Rs 14.62 crore in FY21.

The contraction in profits can be attributed to over 4X jump in ESOP expenses (booked under employee benefits) of Rs 27.7 crore during FY23.