Exicom Tele-Systems IPO: Planning to invest? 10 key risks you should know before subscribing to the issue

Exicom Tele-Systems IPO is a book built issue of ₹429.00 crore. The issue is a combination of fresh issue of 2.32 crore shares aggregating to ₹329.00 crore and offer for sale (OFS) of 0.7 crore shares aggregating to ₹100.00 crore by promoter NextWave Communications.

The minimum lot size for an application is 100 shares. The minimum amount of investment required by retail investors is ₹14,200. The company has reserved not less than 75 per cent of the issue for Qualified Institutional Buyers (QIB), not more than 10 per cent for retail investors and not more than 15 per cent for Non-Institutional Investors (NII).

The promoters of the company, being the corporate Promoter, NextWave Communications Private Limited and the individual Promoter, Anant Nahata. Monarch Networth Capital Ltd, Unistone Capital Pvt Ltd and Systematix Corporate Services Limited are the book running lead managers of the Exicom Tele-Systems IPO, while Link Intime India Private Ltd is the registrar for the issue.

Ahead of the issue opening, Exicom Tele-Systems has raised ₹178.05 crore from anchor investors. The company has also undertaken a pre-IPO placement of 52.59 lakh equity shares at an issue price of ₹135 per share aggregating to ₹71 crore.

The allotment for the Exicom Tele-Systems IPO is expected to be finalized on Friday, March 1, 2024. Exicom Tele-Systems IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, March 5, 2024.

Incorporated in 1994, Exicom Tele-Systems Limited specializes in power systems, electric vehicle (EV) charging, and other related solutions. The company operates under two business verticals. The company is the first mover in power management solution and EV charging infrastructure.

It has 60 per cent market share in EV charging segment and is poised for bright prospects ahead with shift from conventional fuel to EV vehicles globally. Exicom Tele-System’s revenue decreased by 14.79 per cent and profit after tax (PAT) rose by 24.07 per cent in FY23. The market capitalization of Exicom Tele-Systems IPO is ₹1715.71 crore.

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Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):

Exicom Tele-Systems IPO- 10 Key Risks

-The EV supply equipment business is correlated with and dependent upon the continuing rapid adoption of, and demand for electric vehicles. The potential profitability and growth are dependent upon the continued adoption of EVs by businesses, end-users and fleet operators, support from regulatory programs and in each case, the use of the company’s EV chargers, any of which may not occur at the levels they currently anticipate or at all.

-The company is dependent on the top five customers based on revenue contribution under the critical power solutions business, who contributed over 50 per cent of their revenue from operations for the six months ended September 30, 2023 and in each of the last three financial years. The customers include government entities/public sector undertakings. The loss of any of these customers or a reduction in purchases by any of them could adversely affect the business, results of operations and financial condition.

-The company is dependent on global suppliers for the supply of raw materials and key inputs and may not be able to reduce its dependency on such imports. If critical components or raw materials become scarce or unavailable, then the company may incur delays in manufacturing and delivery of their products and in completing the development programs, which could damage their business.

-The operations are dependent on continued research and development initiatives, and the inability to identify and understand, or keep up with evolving industry trends, technological advancements, customer preferences and develop new products to meet the customers’ demands may adversely affect the company’s business.

– The disruption, shutdown or breakdown of operations at the company’s manufacturing facilities may have a material adverse effect on our business, financial condition and results of operations.

-The failure in maintaining the quality accreditations and certifications may negatively impact the brand and reputation.

-The company typically does not enter into long-term arrangements with its customers, and does not have any firm commitment of quantity or price of products to be supplied there under. If the customers choose not to renew their agreements or continue to place orders, the business and results of operations will be adversely affected.

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Published: 27 Feb 2024, 08:53 PM IST