SEBI issued a final observation letter to homegrown drone maker IdeaForge on May 2, 2023, and in the regulator’s language, an observation letter is equivalent to approval.
What Happened? On April 13, SEBI issued an observation letter, signifying approval, to the drone manufacturer that had filed its draft red herring prospectus (DRHP) a couple of months earlier.
The public issue includes a fresh issue of shares worth ₹300 crore and an offer for sale (OFS) of around 48.7 lakh shares. IdeaForge aims to use the listing proceeds to repay its ₹50 crore debt, allocate ₹135 crore to working capital requirements, and invest ₹40 crore in product development. The remaining capital will serve general corporate purposes.
A Brief History: IIT Bombay alumni Ankit Mehta, Ashish Bhat, Rahul Singh, and Vipul Joshi founded IdeaForge in 2017. The startup, which produces drones for civilian and military use and holds 20 patents, has backers such as Infosys, Qualcomm, IndusAge Partners, and Celesta Capital.
According to the DRHP, the promoter group (Mehta, Singh, and Bhat) will not sell shares under the OFS, while Qualcomm, IndusAge Partners, and Celesta Capital may offload some stake. Mehta, the largest individual shareholder, owns 9.93% of the startup, while Singh and Bhat hold 9.7% and 9.6%, respectively. Joshi has a 3.9% stake.
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Celesta Capital is the largest institutional investor, owning 13.4% of shares, followed by Florintree with a 12.4% stake. JM Financial and IIFL Securities will serve as the book-running lead managers for the IPO.
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