ideaForge DRHP: Decoding Infosys-Backed Drone Startup’s Shareholding Pattern

Drone manufacturer ideaForge, which filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) with the Securities and Exchange Board of India (SEBI) last week, is set to become the second drone startup in India to get listed on the stock exchanges after DroneAcharya AI.

The Mumbai-based drone startup, founded in 2007 by IIT Bombay graduates Ankit Mehta, Ashish Bhat, Rahul Singh and Vipul Joshi, is expected to come out with its public issue later this year. It turned into a public company in December 2022 ahead of filing the draft documents for the IPO.

The public issue comprises a fresh issue of shares worth INR 300 Cr and an offer for sale (OFS) of nearly 48.7 Lakh shares. The OFS would see the likes of Qualcomm, IndusAge Partners, Celesta Capital and others selling shares. However, the promoter group will not be selling any shares in the OFS. 

Mehta, Singh and Bhat are the promoters of the drone startup.

Interestingly, Bhat is the only founder selling equity shares in the public issue. He will be selling 1,58,200 equity shares.

Mehta is the largest individual shareholder in ideaForge, holding around 3.69 Mn shares on a fully diluted basis, which amounts to a 9.93% stake. He is followed by cofounders Bhat, Singh and Joshi on ideaForge’s captable. Together, the cofounders hold a 33% equity stake on a fully diluted basis.

Ganapathy Subramaniam, who is a director on ideaForge’s board, is the largest individual shareholder who is not a cofounder. He holds around 1.14 Mn shares on a fully diluted basis or about a 3.08% stake in the company. 

He is followed by Sujata Vemuri, who was the first investor in ideaForge. Vemuri invested in the drone startup in 2009 with Ravi Bhagavatula. Both Vemuri and Bhagavatula currently work at WFA Global Investments and hold a 2.86% equity stake each on a fully diluted basis in the company.

Vikas Malu, who invested in the startup in 2016, holds a 1.61% stake. Meanwhile, Amardeep Singh, former CMO of ideaForge holds a 1.04% stake in the company. Singh is selling 8,362 equity shares in the OFS.

Celesta Capital is the largest institutional investor in ideaForge, with a 13.35% stake on a fully diluted basis held via two Mauritius-based venture capital (VC) funds. Celesta is followed by two more VC firms, Florintree (12.38%) and IndusAge Partners (6.20%). 

Infosys and Qualcomm are two renowned names on ideaForge’s captable. While the IT giant has a 4.44% stake in the company, Qualcomm holds a 3.79% stake. 

Incidentally, Qualcomm is diluting almost all of its holdings in ideaForge in the IPO, offering up to 1.05 Mn shares out of its 1.41 Mn shares in the OFS. Similarly, the likes of Celesta and IndusAge are also selling a significant amount of equity held. 

However, Florintree and Infosys are not selling any shares in the OFS. It is interesting to note that many of ideaForge’s major shareholders are not selling any equity shares in the OFS. 

The dronetech startup is looking to pay off INR 50 Cr debt through the capital raised through the fresh issue of shares. While it will use INR 135 Cr to fulfil its working capital requirements, it will invest another INR 40 Cr in product development.

The rest of the proceeds of the IPO will go towards general corporate purposes, according to the DRHP. 

ideaForge, which manufactures drones for both civilian and military applications, has 15 years of R&D experience and more than 20 patents under its belt. 

It counts the Indian Navy, the Indian Air Force, BSF, NSG, CRPF, Adani, Larsen & Toubro, Indian Oil and Indian Railways among its clients. The startup has raised $38.4 Mn in funding to date.