Exicom Tele-Systems Ltd IPO | News | Overview | Verdict

IPO listed on 5 Mar'24

Exicom Tele-Systems Ltd

Minimum Investment

₹ 14,200 / 100 shares

Grey market premium

₹ 170 (120% premium)

Issue price

₹ 142

Listing price

₹ 265

Listing gains

123 (87%)

Listing on

Mar 5, 2024

Our Verdict:

Exicom Tele-Systems Ltd has established itself as a key player in the global telecom power sector, set to benefit from the surge in smartphone usage, the rollout of 5G networks, and the widespread adoption of Internet of Things (IoT) technology. Moreover, by being an early entrant in the electric vehicle (EV) charging market, the company has secured a dominant 60% market share.
From a valuation perspective, the IPO seems to be fully priced with a Price-to-Earnings (P/E) ratio of 31x, based on the projected FY24 earnings against its post-IPO equity capital. Additionally, the grey market premium (GMP) for the IPO suggests a strong listing on the bourses.
Considering the company's impressive record of maintaining client relationships, along with its growing profitability and the aforementioned points, it is advisable for investors to consider participating in the offering.

About the company

Founded in

9 May'94

Managing director

Anant Nahata

Exicom Tele-Systems Ltd (Exicom) is a leading provider of power management solutions, including power systems and electric vehicle (EV) charging systems, serving both domestic and international markets.
Exicom focuses on two main sectors: (i) critical power solutions, offering design, manufacturing, and servicing of DC power systems and li-ion based energy storage for telecommunication sites and enterprise environments; and (ii) EV supply equipment solutions, delivering advanced smart charging systems for residential, business, and public usage in India.
As a pioneer in the EV charging segment in India, Exicom's products meet both global standards like CE and local regulatory requirements, including those set by the Automotive Research Association of India (ARAI).

STRENGTHS

Remarkable Financial Performance: Exicom has showcased impressive growth in its financial metrics, achieving a Compound Annual Growth Rate (CAGR) of 17% in its revenue from operations between FY21 and FY23. This period also saw an impressive 33% increase in EBITDA and a significant 56% surge in net profit.
Improving Profit Margins: Exicom has successfully increased its net profit margins from 2.47% in FY21 to 4.38% in FY23, with a further rise to 6.04% as of September 2023.
Dominance in the Market: Exicom is a recognized leader with a market share of 16% in the DC power systems sector and around a 10% share in the market for li-ion batteries for the telecommunications industry as of March 31, 2023.
Pioneering in EV Charger Manufacturing: As one of the initial companies to enter the EV charger manufacturing field in India, Exicom has gained a significant early-mover advantage. By March 31, 2023, it boasted a market share of roughly 60% in the residential sector and 25% in the public charging sector. As of September 30, 2023, it has installed over 61,000 EV chargers in more than 400 locations across India.
Strong Order Book: For the first half of FY24, Exicom secured orders amounting to Rs 603.36 crore in its critical power business and Rs 133.94 crore in the EV charger segment, showcasing robust demand for its offerings.
Established Customer Relationships: Throughout the six months ending on September 30, 2023, Exicom catered to a diverse clientele of 450 through its critical power and EV charger businesses, reflecting its strong and long-standing customer relationships.

RISK FACTORS

Revenue Concentration: Exicom relies heavily on its top five clients for approximately 57% of its revenue during the six-month period that concluded in September 2023. The loss of any major client or a decrease in their orders could negatively impact the company's operations, performance, and financial stability.
Inconsistency in Financials: Earlier in FY21, Exicom had reported an operational loss of Rs 10.79 crore. It also suffered a net loss in H1 FY23. Further, revenue decreased by around 16% in FY23.
Export Revenue Vulnerability: A significant portion of the firm’s income, 38.92%, comes from its international sales. Fluctuations in foreign exchange rates, along with competition from domestic providers in those markets, could pose risks to its export segment.
Cash Flow Concerns: Exicom experienced negative cash flows from its operating activities in FY21 and the first half ending on September 30, 2022. Continuous negative cash flows could pose risks to its operational efficiency and financial health.

Financials

All Values are in Cr.

Issue details

Issue type

Mainstream

Issue size

₹ 429 crore

Fresh Issue

₹ 329 crore

OFS

₹ 100 crore

Price range

₹ 135 - 142

Lot size

100 shares

Issue Objective

The net proceeds from the issue are intended to be utilised towards:

Part-financing the cost towards setting up production/assembly lines at the planned manufacturing facility in Telangana;
Repayment/pre-payment of certain borrowings availed by the company;
Part-funding incremental working capital requirements of the company;
Investment in R&D and product development; and
General corporate purposes.

Dates

Bidding open

27 Feb'24

Bidding close

29 Feb'24

Allotment date

1 Mar'24

Refund date

4 Mar'24

Listing

5 Mar'24

IPO Reservations

Qualified institutional buyers

>75%

Non-institutional investors

<15%

Retail individual investors

<10%

Read the Offer Document

This document has been issued by Liquide Solutions Private Limited for information purposes only. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall Liquide Life Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.

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