Exicom Tele-Systems Limited, a well-known company in the field of power systems and electric vehicle (EV) charging solutions, plans to launch an initial public offering (IPO) from February 27, 2024 to February 29, 2024. The purpose of this article is to: Provide detailed insights to investors. Exicom Telesystems IPOcompany financial overview, IPO objectives, positive aspects of the investment, risk factors, and final review.
Introducing Exicom Telesystems IPO
Exicom Tele-Systems’ IPO is a book-build issue of Rs 429 crore, with a fresh issue of Rs 2,320 crore worth a total of Rs 329 crore and an offer of 70 million shares worth a total of Rs 100,000 crore. It is configured. The IPO will begin offering on February 27, 2024, close on February 29, 2024, and the allotment is expected to be completed on Friday, March 1, 2024. Listing on BSE and NSE is tentatively scheduled for Tuesday, March 5, 2024 The price band for the IPO has been set at ₹ 135 to ₹ 142 per share, with a minimum lot size of 100 shares.
About EXICOM Telesystems Co., Ltd.
Exicom Tele-Systems Limited was founded in 1994 and specializes in power systems and EV charging solutions. The company operates in two main areas: power systems and EV charging solutions. Along with providing uninterruptible power solutions for digital communication networks, Exicom has also entered the EV charging segment, with over 6,000 AC and DC chargers deployed in India and Southeast Asia. As of September 30, 2023, the company has installed over 61,000 of his EV chargers across his 400 locations in India.
Financial overview
Exicom Tele-Systems Limited’s revenue decreased by -14.79% for the year ended March 31, 2023 to March 31, 2022, while profit after tax (PAT) increased by 24.07%. Did.
As of September 30, 2023, the company’s market capitalization was Rs 1715.71Cr and key performance metrics include ROE 13.38%, ROCE 10.92%, and P/BV 5.63.
Purpose of IPO
IPO goals include both OFS and new issues. 100 million rupees of OFS will be sold to shareholders and the company will get nothing.
For the fresh issue of Rs 329 million, the company has several objectives, including partial financing of the cost of setting up production/assembly lines at its planned manufacturing facility in Telangana and repayment/prepayment of certain borrowings. The company aims to utilize the net proceeds from the IPO for the purpose of , incremental working capital requirements, investments in research and product development, and partial funding for general corporate purposes.
Exicom Telesystems IPO – Positive aspects of investing
Here are some reasons to consider investing:
- Established player in a fast-growing market:The company is a well-established player in the rapidly growing Indian EV charger market. As of March 31, 2023, it has a large market share of 60% in the residential sector and 25% in the public charging sector.
- Broad portfolio of EV charging products: The company offers a wide range of EV charging products, including both slow charging (AC chargers) and fast charging (DC fast chargers) options, depending on residential, business, and public use cases.
- Strong customer base and partnerships: The company has supplied EV chargers to more than 70 customers, including automotive OEMs, domestic CPOs, and fleet aggregators. The company has partnered with industry leading players such as Reliance BP Mobility Limited and Mahindra & Mahindra Limited.
- First mover advantage in the EV industry: The company is one of the first to enter the EV charger manufacturing sector in India, thus gaining first mover and learner advantages and benefiting from the significant growth expected in the Indian and global EV industry. I am in a position to receive it.
- High barriers to entry in the EV charger industry:The EV charger industry is characterized by high barriers to entry such as technology evolution, performance requirements, grid infrastructure compatibility, partnerships, alliances, and service setups, which create competitive challenges for established players like the company. It can act as an advantage.
- Vertical integration and R&D capabilities: With vertically integrated operations, research and development capabilities, and a diverse product portfolio, the company adapts to evolving technology and changing customer requirements, ensuring continuous innovation and product development.
- Track record of growth and expansion: The company has witnessed significant growth in EV charger sales across various categories in recent years, with a compound annual growth rate (CAGR) of 318.89% over the past three fiscal years.
- Experienced and qualified leadership team: Our company is led by a qualified and experienced management team with a proven track record of success in the power electronics industry, and supported by competent and motivated managers and employees.
- Long-term relationships with customers: The company has a track record of long-term relationships with an established customer base, providing customer-centric solutions and value-added products and services.
- Financial performance and operational metrics:The company’s key financial and operational metrics demonstrate consistent growth and profitability, indicating strong performance and potential for future expansion and revenue generation.
risk factors Exicom Telesystems IPO
Based on the information provided, the risk factors associated with investing in IPOs are:
- Dependence on EV introduction: The success of the electric vehicle supply equipment business is closely related to the spread and demand for electric vehicles. A slowdown or decline in EV penetration could have a negative impact on the company’s profitability and growth prospects.
- Market volatility and uncertainty: India’s EV industry is in its infancy and is characterized by rapid changes in technology, consumer preferences, and government regulations. Market volatility and uncertainty can impact demand for EVs and related charging infrastructure.
- OEM Reliance and Consumer Adoption: The company’s ability to gain market share in the EV charger market will depend on the development and sales of EVs by auto OEMs and the willingness of consumers to adopt EVs. Delays or failures in the introduction of new EV models may impact market demand for EV chargers.
- Dependence on top customers: The company’s significant power solutions business is highly dependent on its top five customers, which contribute a significant portion of its revenue. The loss of these customers or a reduction in their purchasing volume could have an adverse effect on the Company’s financial performance.
- Dependence on global suppliers: Importing raw materials and key inputs from suppliers around the world, especially countries like China, exposes companies to supply chain risks. Shortages or unavailability of critical components may result in manufacturing or delivery delays.
- Research and development challenges: The company’s success depends on its ability to continually innovate and develop new products in line with evolving industry trends and customer preferences. Our inability to keep pace with technological advances and market demands could adversely affect our competitiveness.
- operational risks: Any interruption, stoppage or failure of manufacturing facility operations could have a material adverse effect on the Company’s business and financial condition. Managing operational risks such as equipment failures and occupational accidents is essential for continued operations.
- Quality certification and certification: Failure to maintain quality certifications and certifications can damage a company’s brand and reputation and affect customer trust.
- Lack of long-term arrangements with customers: Lack of long-term arrangements with customers or commitments regarding product quantities or prices can create uncertainty in revenue generation and business continuity.
- Regulatory measures and compliance: Regulatory actions against members of the promoter group and compliance issues with regulators such as SEBI and stock exchanges pose risks to the company’s reputation and operations.
- Dependence on specific sectors: Most of the revenue is derived from customers in the Indian telecom sector. Adverse changes in this area could adversely affect the company’s financial performance.
- Past operating loss: Recording operating losses in the past raises concerns about the company’s ability to generate profits in the future, potentially impacting stock value and investor confidence.
Exicom Telesystems IPO – Conclusion and review
Exicom, the leader in the EV charger market in India, has gained significant market share, increasing confidence in its expertise and market position. The company has deployed more than 61,000 of its EV chargers at its 400 locations, showing solid growth potential in a rapidly expanding industry. The rapid increase in EV adoption across various vehicle segments promises sustained demand for Exicom’s diverse portfolio of EV charging products. Moreover, with our vertically integrated operations and R&D capabilities, we are well positioned to capitalize on the evolving EV landscape in India and globally.
The IPO also involves risks, including regulatory uncertainty, technological advances and market competition in the dynamic electric vehicle sector. High barriers in the industry, such as evolving technology standards and grid infrastructure compatibility, present ongoing challenges. Additionally, the Company’s success depends on continued growth in the EV market, which may be affected by government policies and consumer trends.
Investors should carefully evaluate these risk factors before considering investing in Exicom’s IPO.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
