Exicom Tele-Systems IPO to Open on Feb 27, Plans to Raise ₹329 Crore
Exicom Tele-Systems IPO
Exicom Tele-Systems IPO: A Comprehensive Exploration of Opportunities and Challenges
The anticipation surrounding the Initial Public Offering (IPO) of Exicom Tele-Systems, a prominent electric vehicle (EV) charger manufacturing company, has been steadily growing.
As the company prepares to open its IPO on February 27, offering investors the chance to participate until February 29, it marks a significant milestone in the rapidly evolving landscape of the electric mobility sector.
IPO Details and Stakeholder Distribution:
The IPO comprises the issuance of fresh equity shares amounting to Rs 329 crore, coupled with 70.42 lakh shares to be sold under the Offer for Sale (OFS).
Anchor investors will have exclusive access on February 26, leading up to the broader window for investors. The IPO price is speculated to be around Rs 140 per share.
NextWave Communications emerges as the dominant stakeholder, holding an impressive 76.55 percent stake in Exicom Tele-Systems. Additional stakeholders include Satellite Finance with a 4.64 percent stake, Vinson Brothers with 4.35 percent, and HFCL, which holds a 7.74 percent stake.
The recent surge in HFCL stock by over 30 percent this year is attributed to the buzz surrounding Exicom’s imminent IPO.
The IPO is under the guidance of book-running lead managers Monarch Networth Capital, Unistone Capital, and Systematics Corporate Services, with NextWave Communications and Anant Nahata as the company’s promoters.
Fund Utilization:
The funds raised through the IPO will be strategically allocated for multiple purposes. Notably, the establishment of a manufacturing facility in Telangana is a key focus, aligning with the company’s commitment to scaling its production capabilities.
Additionally, a portion of the funds will be allocated towards debt repayment, a prudent move to enhance financial stability.
The company also plans to channel resources into its state-of-the-art Research and Development (R&D) facility, emphasizing the commitment to innovation, and to meet the working capital needs, ensuring operational efficiency.
Diverse Business Verticals:
Exicom Tele-Systems operates under two primary business verticals, each contributing to its unique market position.
The first vertical is the EV charger business, where the company specializes in providing smart charging systems catering to residential, business, and public charging needs across India.
The second vertical is the Power Solutions business, focusing on designing, manufacturing, and servicing digital infrastructure technology.
This technology is geared towards providing comprehensive energy management solutions in telecommunication sites and enterprise environments, both in India and internationally.
Dominance in EV Charger Manufacturing:
Exicom Tele-Systems has emerged as a frontrunner in the electric vehicle charging infrastructure, being among the first companies to venture into EV charger manufacturing.
As of March 31, 2023, the company boasts a commendable market share of 60 percent and 25 percent in the residential and public charging segments, respectively.
What sets Exicom apart is its deployment of over 35,000 EV chargers across 400 locations in India, a testament to its robust market presence.
The company operates three manufacturing facilities strategically placed in India, including the Solan Facility in Himachal Pradesh, and Gurugram Facility I and Gurugram Facility II in Haryana.
This infrastructure positions Exicom Tele-Systems as a reliable and scalable provider in the burgeoning EV charging market.
Financial Performance Analysis:
Delving into the financials, it is imperative to evaluate the company’s performance. In FY23, Exicom Tele-Systems witnessed a 16 percent decline in revenue from operations, totaling Rs 707.93 crore.
Despite the dip in revenue, the profit after tax exhibited a noteworthy surge of 24 percent, reaching Rs 6.37 crore compared to the previous fiscal year.
However, a closer examination reveals a decline in Return on Capital Employed (RoCE), dropping from 17.66 percent in FY22 to 10.92 percent in FY23.
Foreign customers contributed 8.79 percent to the total revenue from operations in FY23, adding an element of international exposure to Exicom’s revenue stream.
A significant shift in revenue composition is evident, with revenue from the Power Solutions business decreasing from 91.56 percent in FY22 to 68.33 percent in FY23.
In contrast, revenue from the EV charger business witnessed substantial growth, increasing from 8.44 percent to 31.67 percent during the same period.
This shift reflects the dynamic nature of Exicom’s business model, adapting to the evolving demands of the market.
Diverse Clientele and Industry Impact:
Exicom Tele-Systems has successfully secured partnerships with a diverse clientele, further solidifying its position in the market.
The clientele for the EV charger business includes national Common Point Operators (CPOs) such as Reliance BP Mobility Limited (JioBP) and Fortum Charge & Drive India.
Fleet aggregators like BlueSmart Mobility and Lithium Urban Technologies, along with automotive Original Equipment Manufacturers (OEMs) such as Mahindra & Mahindra, MG Motors, and JBM, contribute to the extensive reach of Exicom’s solutions.
The company’s impact on the EV charging infrastructure is profound, having deployed a significant number of chargers across the country.
This not only contributes to the growth of the electric mobility ecosystem but positions Exicom as a key player in shaping the future of sustainable transportation.
Investor Considerations:
For potential investors eyeing Exicom Tele-Systems’ IPO, a comprehensive understanding of its unique position in the EV charging sector is essential.
The global emphasis on sustainable and eco-friendly transportation solutions positions the company favorably. With the EV market gaining momentum, the demand for reliable and efficient charging infrastructure is poised to soar.
As one of the early entrants with a substantial market share, Exicom Tele-Systems is well-positioned to capitalize on this trend.
However, investors should exercise due diligence and be mindful of the challenges and risks associated with the industry.
The EV sector is dynamic, influenced by regulatory changes, technological advancements, and market competition.
The financial metrics, particularly the decline in RoCE, warrant a closer look. Understanding the company’s strategies to address these challenges will be crucial for potential investors.
Strategic Initiatives and Future Prospects:
Exploring the strategic initiatives undertaken by Exicom Tele-Systems is vital for gauging its future prospects.
The allocation of funds towards establishing a manufacturing facility in Telangana indicates a commitment to expanding production capabilities, potentially catering to the rising demand for EV chargers. Debt repayment contributes to financial stability, a critical aspect for sustainable growth.
Investors should also closely examine the company’s plans for its R&D facility. In an industry characterized by rapid technological advancements, innovation plays a pivotal role.
A well-funded and equipped R&D facility positions Exicom to stay ahead of the curve, adapting to emerging trends and technologies in the EV charging and power solutions space.
Final Remarks:
In conclusion, Exicom Tele-Systems’ IPO presents investors with a unique opportunity to participate in the rapidly growing EV ecosystem.
The company’s established market presence, innovative solutions, and strategic initiatives in the EV charger manufacturing space make it a compelling prospect.
The allocation of funds towards expansion, debt repayment, and R&D underscores a strategic approach to fortify the company’s position in a competitive market.
As the world undergoes a significant shift towards sustainable transportation, Exicom Tele-Systems is poised to play a pivotal role.
Its extensive deployment of EV chargers, diverse clientele, and commitment to technological innovation position it as a key player in shaping the future of electric mobility.
However, a thorough analysis of financials, industry dynamics, and the company’s strategies is recommended for informed investment decisions.
Potential investors should weigh the opportunities against the inherent risks, considering the dynamic nature of the EV sector.
With careful consideration and a proactive approach to industry trends, Exicom Tele-Systems’ IPO offers a gateway for investors seeking exposure to the burgeoning electric mobility sector and the transformative landscape of sustainable transportation.
