Drone Destination Ltd IPO : Review, Peer comparison, valuation, dividend policy & GMP

Drone Destination Limited - Complete Overview

Drone Destination Limited was initially incorporated as a private limited company named "Drone Destination Private Limited" on May 10, 2019. Subsequently, on April 29, 2023, the company underwent a name change to "Drone Destination Limited." 

The company is headquartered in Delhi and operates DGCA-Authorized Drone Training Bases in various cities including Gurugram, Bangalore, Gwalior, Kangra, Coimbatore, Madurai, and Bhopal.

It is a DGCA-authorized Remote Pilot Training Organization (RPTO) and offers certified training programs at multiple locations across India.

Having successfully trained 362 drone pilots in India, Drone Destination Limited holds the distinction of being the largest Drone Training Network in the country. 

The company has its partnership with Training Partner IGRUA and the company's prominent position in DGCA-certified Drone Pilot Training, boasting the highest market share.

Furthermore, in October 2022, the company became the first Drone Training Partner of the National Skill Development Corporation (NSDC). With over 80 clients from both private and government sectors, Drone Destination Limited continues to thrive.

Additionally, the company actively participates in the Svamitva Yojna, engaging in survey and large-scale mapping activities across Uttar Pradesh, Gujarat, and Karnataka. This involvement establishes the company as a leading player in this initiative.

 

 

What does the company do? 

Drone Destination Limited is a company that specializes in offering Drone as a Service and Training. As an authorized Remote Pilot Training Organization (RPTO) by DGCA, they provide certified training programs across various locations in India.

 

Company Products

The company provides training for drone pilots that are certified by DGCA. They also offer services in drone surveying and mapping, agriculture drone spray training, as well as surveillance and monitoring.

 

IPO Overview 

Drone Destination Limited is gearing up to launch its IPO in the market from July 7th to July 11th, 2023. This SME IPO is priced between Rs. 62 to Rs. 65 per share, with a face value of Rs 10.

The upcoming IPO will be listed on the NSE SME platform. Retail investors can bid for a maximum of 1 lot, which consists of 2200 shares. 

The IPO allocation follows a strategic approach, with 35% reserved for retail investors, 15% for non-institutional investors, and 50% for institutional investors.

The IPO's total issue size is 6,800,000 shares, amounting to Rs. 44.20 Cr. The registrar for the IPO is Maashitla Securities Pvt. Ltd.

 

Drone Destination Limited IPO timetable

EVENTS	DATE
IPO Opening Date	7 JULY 2023
IPO Closing Date	11 JULY 2023
IPO Allotment Date	14 JULY 2023
Refund initiation	17 JULY 2023
IPO Listing Date	19 JULY 2023

 

Drone Destination Limited IPO Details

IPO Opening & Closing Date	07 July 2023 to 11 July 2023
Face Value	Rs. 10 per share
Issue Price	Rs. 62 to Rs. 65 Per share
Lot Size	2000 Shares
Price of 1 Lot	Rs 130,000
Issue Size	6,800,000 Shares  (aggregating up to Rs. 44.20 Cr)
Offer for Sale	NA
Fresh Issue	6,800,000 Shares  (aggregating up to Rs. 44.20 Cr)
Listing at	NSE, SME
Issue Type	Book Built Issue IPO
Registrar	Maashitla Securities Pvt. Ltd.

 

Drone Destination Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Drone Destination Limited IPO Reservation

Institution Portion	50%
Non-institution Portion	15%
Retail Portion	35%

 

Company Financial

Amount in crores

Period	FY 21	FY 22	FY 23
Total Assets	96.34	278.30	2359.33
Total Revenue	39.33	257.16	1207.73
Net Profit	-4.56	20.73	244.19
Net Worth	2.42	23.15	1757.34
Reserve & Surplus	-8.58	12.15	1257.34
Total Borrowing	9794.46	151.09	159.17

 

Revenue generated from various sources

Amount in thousands

	Fiscal 2023	Fiscal 2022	Fiscal 2021
Particular	% of Total Revenue	% of Total Revenue	% of Total Revenue
Training	51.47%	95.73%	100%
Survey & Mapping Service	47.42%	0.00%	Nil
Drone Surveillance Services	0.58%	0.00%	Nil
Drone Consultancy Services	0.50%	1.95%	Nil
Sale of Product	0.04%	2.32%	Nil
Total	100%	100%	100%

 

Objective of the Issue 

The company aims to achieve the following objectives through the issue:

• To cover the costs of acquiring new drones.

•  To fund the acquisition of a vehicle.

•  To fulfil the capital expenditure requirements.

• To address the working capital needs.

• General corporate purposes.

• To cover the expenses related to the IPO issuance.

 

Promoters and Management of Drone Destination Limited

The company benefits from the support of a proficient team of promoters, including Mr Chirag Sharma, aged 34, who serves as the co-founder and Managing Director and Mrs Shashi Bala, aged 58, is the co-founder and Executive Director of the company. Both individuals possess extensive industry experience and play crucial roles in guiding the company towards success.

Pre-issue Promoters Holding	85.14%
Post-issue Promoters Holding	62.31%

 

Peer Comparison

Company Name	CMP	EPS	P/E ratio	PAT (Rs thousand)
Drone Destination Limited	NA	25.8	NA	24,419.00
Droneacharya Aerial Innovations Limited	149.05	1.77	84.21	34,197.00

 

IPO's Valuations

The valuation of the IPO was determined by evaluating a combination of quantitative and qualitative factors associated with the company. The quantitative factors taken into account included an EPS of 25.8, RoNW of 13.9%, NAV of 35.15, and ROCE of 18.65%.

 

KPI of Drone Destination Limited

KPI	Values
EPS	Rs. 10 per share
RoNW	Rs. 62 to Rs. 65 Per share
NAV	2000 Shares
ROCE	Rs 130,000

 

Dividend Policy

The company currently lacks a formal dividend policy and has not distributed any dividends in any financial year. However, the possibility of future dividend payments remains open, subject to the recommendation of the Board of Directors. The decisions will depend on factors including the financial condition, operational results, capital requirements, surplus, etc. as per the Drone Destination Limited Drhp.

 

IPO's Strengths

• The largest Drone Training Network in India, in collaboration with the Training Partner IGRUA.
• The highest market share in DGCA-certified Drone Pilot Training.
• Key partnerships in the Training & Drone Service Space.
• Supported by Hubblefly Technologies with extensive Drone manufacturing capabilities.

 

IPO's Weaknesses

• Non-compliance with the regulations and rules prescribed by the Government of India.
• Dependence on group companies and other drone manufacturing companies to fulfil drone requirements.
• Legal proceedings against promoters and directors.

 

 

IPO GMP

The Current GMP of this IPO is Rs. 55.

 

Conclusion 

Drone Destination Limited IPO marks another significant IPO in the thriving drone industry, following the successful Ideaforge IPO. With the drone industry experiencing remarkable growth and anticipated to continue its upward trajectory, investing in this IPO presents an appealing opportunity. Notably, Drone Destination Limited stands out as one of the largest Drone Training Networks in India and commands the highest market share in certified Drone Pilot Training. However, it is essential to evaluate all relevant factors before making an informed investment decision.

 

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To Read the Prospectus of the Company Click Here to Download the DRHP

 

 

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