SUMMARY
The drone startup got listed on the exchange at nearly a 90% premium to its issue price on December 23, 2022. Currently, its shares are trading 63% higher than their listing price of INR 102
In FY23, the startup expects to see a 300% YoY jump in its top line to about INR 10 Cr and a profit after tax of approximately 20%
Currently, 65% of DroneAcharya’s revenue comes from training and edtech and 30% from services
At a time when tech stocks across the globe are roiling in the troubled waters of volatility, Indian drone startup DroneAcharya stepped forth and got listed on the BSE SME platform, and, unlike many other startup stocks listed on the Indian bourses, has witnessed a significant rally since then.
Interestingly, the drone startup got listed on the exchange at nearly a 90% premium to its issue price on December 23, 2022.
But what turned out to be a major differentiating factor for this drone startup?
“I think the move was properly calculated by the market veterans, people who understand the market, and the overall game behind it. Correctly valuing a company is very important,” said Prateek Srivastava, the founder and MD of DroneAcharya.
He explained that unlike many startups that go almost 3-4X in valuation from the last funding round to the next, despite lagging on the revenue front, DroneAcharya wanted to establish that IPOs do not need to be overpriced.
“We gave our shares at a pre-IPO pricing. All the investors who entrusted us almost a year back, we provided shares to the entire public at the same price, which has been a very rare incident,” said Srivastava, whose drone startup currently stands at INR 399.17 Cr market cap and price of INR 166.4 on the BSE (as of 17th Feb 2023).
Backed by key investors such as Shankar Sharma, Harshal Mode, Ashish Nanda, and Bollywood celebrities Aamir Khan and Ranbir Kapoor, DroneAcharya has been able to conclude a successful IPO.
Now, the startup is looking to bolster its position in the sunrise sector, which was valued at $830 Mn in FY20 and is projected to grow at a compound annual growth rate (CAGR) of 14.5% between 2021 and 2026.
Rise And Shine: It’s Time To Give Drones To The World
DroneAcharya was incorporated in 2017, but the startup went into hibernation for around three years due to the pandemic and other reasons. It became active in 2020-21 and started operations for the first time.
Having years of experience in the drone industry and working with international firms like PrecisionHawk and Terra Drone, its core team, led by Srivastava, decided to leverage its knowledge in building the company once again to boost India’s burgeoning drone industry.
In the beginning, DroneAcharya was primarily focused on drone pilot training as the pandemic hindered its other operations. However, slowly the startup grabbed several big projects from the likes of the World Bank, where it started providing Drone-as-a-Service (DaaS) solutions.
Within a year, DroneAcharya grew from a team of three people to around 70 employees and started generating revenues.
From about INR 1 Lakh in revenue generated in 2021, DroneAcharya clocked a revenue of INR 3.58 Cr in FY22. In FY23, the startup expects to see a 300% year-on-year (YoY) jump in its top line to about INR 10 Cr and a profit after tax of approximately 20%.
Currently, it has over 20 clients from government, defence, and civilian backgrounds. The drone startup has trained more than 600 students till date for DGCA-certified drone pilot training, GIS, Python, drone building, and other courses.
Srivastava said that the company is foraying into drone manufacturing at a time when it is getting good traction from training and services.
The startup has honed its expertise in DaaS over the last few years by catering to more than 30 industries, including mining, agriculture, smart cities, road, water, renewable energy, and oil and gas. Currently, 65% of DroneAcharya’s revenue comes from training and 30% from services.
While the startup is looking to fast-track drone sales from the next financial year, it currently earns 5% of its total revenues by selling drones.
At 33% each, DroneAcharya expects the revenue split to be equal among training, services, and selling from the next financial year.
Currently, it is working on a carbon financing and agroforestry project in Maharashtra with the World Bank. DroneAcharya is also working with the Haryana Government and has just finished a project with IIT Gandhinagar and the Archaeological Survey of India for 3D mapping of Vadnagar city in Gujarat.
Besides, Srivastava said that the startup has so far trained almost 300 pilots in India. On the defence side, it is currently providing training but plans to gradually foray into product supply and services.
DroneAcharya also has ongoing projects in Abu Dhabi and Central Asia.
State-Of-The-Art Drones On The Cards
Amid India’s push for domestic manufacturing of drone components, DroneAcharya pondered upon the idea of foraying into manufacturing, with a team that has spent 10 years in the industry and made around 45 different types of drones.
DroneAcharya is currently focussing on manufacturing four to five products and expects to roll them out by April this year.
Drone-in-a-box solution and underground and underwater drones are the two categories that the startup plans to manufacture at first.
“We are not going to compete with regular drones which just fly and capture data. We are getting into some niche segments like 100% automated drone-in-a-box solutions,” Srivastava said.
Drone-in-a-box would be the first-of-its-kind initiative in India, as this solution will allow users to operate a drone at even the most critical locations from anywhere across the globe. The startup claims that these drones will be able to withstand temperatures in the range of -60 degrees to plus 60 degrees Celsius, 3 ft of snow, and rain and hailstorms.
“There is a secured connection, which will just activate the box, it will open the drone, the drone will fly, complete its mission, and come back,” Srivastava explained.
“This is a technology that nobody has heard about or seen in India. This solution can save human efforts at even the most critical locations,” he added.
DroneAcharya will also engage in manufacturing underground and underwater drones and drones for agriculture, logistics, and heavy payloads.
The manufacturing process is expected to start by the end of February.
However, it must be noted that 100% indigenous manufacturing is still not possible in this industry. Therefore, DroneAcharya plans to collaborate with some overseas players for certain components.
According to Srivastava, earlier, around 30% of the components in drones produced in India were indigenous while 70% were sourced from other countries. However, this ratio is now reversing.
“There are three or four main components for which we still have dependency overseas — one is battery and the second is motors. Further, there are some electronic speed controllers (ESCs), which are something like CPUs for drones, and we are yet not there,” said Srivastava.
While drone flying parameters such as propellers, sensors, and frames are available in India, there is still a 30% dependency on imports, he said.
Drones For All?
From a handful of startups a couple of years of back, the Indian drone sector now counts players such as Garuda Aerospace, ideaForge, Aarav Unmanned Systems (rebranded as Aereo), and Dhaksha Unmanned System, among others, who are scripting the future of this emerging sector.
Srivastava said that there are currently around 600 startups registered within the country. While the overall industry size is more than INR 4,000 Cr, the civilian market captures less than 25% of it, and the remaining is for defence purposes.
Having worked largely on the civilian side, DroneAcharya plans to serve both segments.
Besides its product and service offerings in India, DroneAcharya has been expanding globally via its partner companies in various countries.
While physically, it has a presence in the US and India, the startup is now beginning to have its partnership network and associations with companies in Southeast Asia, the Middle East, the African region, Central Asia, and Europe.
DroneAcharya’s international expansion goal is in sync with India’s goal to become a drone hub by 2030.
Also, following the footprints of DroneAcharya, ideaForge plans to get listed soon. Last week, the startup filed its DRHP. Recently, Garuda Aerospace, too, told Inc42 that it was planning to get listed in the next two years.
