Decoding Red Herring Prospectus of ideaForge
                     Decoding Red Herring Prospectus of 
ideaForge
Drone manufacturing company, ideaForge has filed its Red Herring Prospectus (RHP) with 
market regulator Security and Exchange Board of India (SEBI). The Mumbai-based company is 
looking to raise around Rs 570 crore from the public market.
The fresh issue size will be Rs 240 crore while the company will offer its 48,69,712 equity 
shares, aggregating a sum of around Rs 327 crore through an offer for sale.
The company had filed its Draft Red Herring Prospectus (DRHP) with SEBI in February this 
year to raise Rs 300 crore via fresh issue. As per the board, the size of the fresh issue of up to 
Rs 300 crore has been reduced to the revised size of Rs 240 crore.
The RHP further revealed that the drone startup has 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 has been valued at around Rs 
2,560 crore.
ideaForge has appointed JM Financial and IIFL Securities as the book-running lead managers 
(BRLMs) for the listing while Link Intime India Private Limited will be the registrar.
Out of the total fresh proceeds from the public, Rs 135 crore will be used towards filling the 
working capital gap. The company plans to utilize a further Rs 50 crore for repayment or 
prepayment of borrowing from HDFC Bank, Axis Bank and Export Import Bank of India and Rs 
40 crore for product development and the rest for other corporate purposes.
The offer period of the IPO will be 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.
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. They also 
offer software and embedded sub-systems that enable industry-specific applications.
Additionally, the company is developing UAVs as an on-demand service for various applications 
such as DFR, progress monitoring, and inspections. This will allow quick deployment of drones 
to assess situations and make informed decisions in real-time, even before first responders 
arrive.
Shareholding Pattern
As of the date of RHP, Celesta Capital is the largest stakeholder in the company with 12.78% 
stakes followed by Florintree Enterprise who owns 11.85% of the company. Promoters – 
Ankit Mehta, Rahul Singh and Ashish Bhat collectively command 27.89% of the cap table. 
The complete shareholding pattern of the company can be seen below:
Financial Performance
ideaForge’s revenue from operations surged 16.7% to Rs 186 crore in FY23 from Rs 159.4 
crore in FY22. ideaForge primarily provides drones to Indian defence forces, hence it remains 
the largest source of revenue in FY23 forming nearly 70% of the total. In the civil segment, its 
drones are used by forest departments, state police departments, disaster management 
forces, among others.
Besides operating income, ideaForge also earned Rs 10.4 crore as non-operating revenue 
(income and gains on financial assets).
Following the 42.7% and 89.6% increase in its cost of materials and employee benefits to 
Rs
58.84 crore and Rs 50.9 crore respectively during the year, ideaForge’s total expenditure went 
up 39.8% to Rs 155.6 crore in FY23. ideaForge spent around 27.37% of its operating revenue 
on employee benefits.
The rapid rise in expenses negatively affected the company’s bottom line. ideaForge’s 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.
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