Coromandel To Acquire Stake In Drone Startup Dhaksha For INR 204 Cr

Agri-solutions provider Coromandel International will pick up an additional 32.68% stake in drone manufacturer Dhaksha Unmanned Systems for an all-cash deal of INR 204 Cr.

This comes nine months after Coromandel International’s venture capital arm Dare Ventures picked up an 18.34% stake in the deeptech startup for an undisclosed amount. Post the execution of the deal, Coromandel International will own a majority stake (51.02%) in the Chennai-based startup.

As part of the transaction, Dare Ventures will sell and transfer its stake to its parent company Coromandel International at cost. The proposed stake sale pegs Dhaksha Unmanned Systems at a valuation of INR 625 Cr.

As a regulatory filing by Coromandel, the company expects the acquisition to go through during the second quarter of the financial year 2023-24 (FY24).

The move is part of Coromandel’s strategy to diversify operations and to identify ‘promising avenues of growth’ outside its core operations. The acquisition will also enable the company to strengthen its presence in the unmanned aerial services (UAS) segment, which is likely expected to complement Coromandel’s agro-chemical and agri-solutions business.

On the other hand, Dhaksha Unmanned Systems will be able to leverage the capital to scale research and development (R&D) and further fuel its growth ambitions.

“… We are excited to partner with Coromandel and we see significant value creation opportunities for Dhaksha going forward. We remain committed to our nation building endeavours and will work towards adopting world class drone technology solutions for agriculture and defence sectors,” said director and chief executive officer (CEO) of Dhaksha Unmanned Systems Ramanathan Narayanan.

Reacting to the development, executive vice-chairman of Coromandel International Arun Alagappan said, “… Our investment in Dhaksha marks a significant foray into next generation cutting edge UAS technology applications… We are committed to drive Atmanirbhar Bharat vision in drone manufacturing and intend to improve domestic value creation opportunities and build frontier technologies in this space.”

Founded in 2019, Dhaksha Unmanned Systems is a deeptech startup that offers drone-based solutions for agriculture, defence and enterprise applications. It also conducts remote pilot training and has, so far, coached 950 pilots.

With as many as three DGCA-type certificates in its kitty, Dhaksha was also shortlisted for the centre’s ambitious production-linked incentive (PLI) scheme for drone manufacturers last year. The deeptech startup’s annual turnover stood at INR 4.52 Cr in FY22, down from INR 6.06 Cr in FY21.

Curiously, the announcement comes barely a week after the centre announced that it would relax norms for the export of drones meant for civilian use-cases. Besides, the union government, in the recent past, has also undertaken a slew of reforms to spur the homegrown drone industry.

These include banning the import of drones, PLI for local manufacturers and amending Drones Rules, 2021 to streamline drone certification. The result has seen the Indian drone industry witness significant investor interest with large conglomerates such as Reliance and Adani also rolling out their drones.

Since the beginning of 2022, 15 Indian drone startups such as Aarav Unmanned Systems, DroneAcharya and EndureAir Systems have secured nearly $54 Mn in funding from multiple investors. While DroneAcharya listed on the bourses last year, another player ideaForge is all geared for an IPO.

As per a report, the homegrown drone industry is projected to reach a market size of $1.9 Bn by 2026.