Exicom Tele-Systems IPO: Business Model, KPIs, SWOT Analysis, and FAQs
A pioneer in the EV charging space is leaping forward with its IPO. This marks a pivotal moment for the company and India’s existing and evolving EV landscape.
Today’s blog will explore Exicom’s journey toward clean and sustainable transportation.
Company Overview
Exicom was founded in 1994 as Himachal Exicom Communications Limited for manufacturing DC Power Systems, and since then, it has carved out a niche for itself in the Indian market.
Exicom Tele-Systems Limited is a company based in India that provides solutions for powering digital communication infrastructure. The company is headquartered in Gurgaon, India and has a presence in over 50 countries. They are a leading provider of power solutions for the telecom industry.
The company faces tough competition from Amaraja Raja Batteries, Exide Industries, HBL Power Systems, Coslight India, and many others.
Business Model
Exicom Tele-systems functions under two business verticals
Electric Vehicle Charger Business
In this segment, the company offers smart charging systems with innovative technology in India for residential, business and public charging use.
The EV Charger Business started in 2019 and provides slow, fast, and Automatic Original Equipment Manufacturer (OEM) solutions. All these products fulfil the Indian certification requirements and global standards.
Additionally, the company aims to accelerate India’s transition to electric mobility by designing and building EV chargers for homes and businesses and laying the groundwork for widespread EV ownership.
The customers of EV Charger Business include Reliance BP Mobility Limited and Fortum Charge & Drive India Private Limited, fleet aggregators such as BluSmart Mobility and Lithium Urban Technologies, and established automotive OEMs like Mahindra & Mahindra Limited, MG Motors Limited, and JBM Limited.
Did You Know?
Exicom has deployed over 35,000 EV chargers across 400 locations in India.
Critical Power Solutions Business
The company designs, manufactures, and services critical digital infrastructure technology in this segment to deliver overall energy management at telecommunications sites and enterprise environments in India and foreign countries. Exicom holds a market share of 16% in the DC Power Systems under Critical Power business and is identified as a leading player in the Li-ion Batteries market.
Furthermore, under this segment, the company offers a diversified portfolio of DC power conversion systems and Li-on-based energy storage solutions to provide backup power during grid interruptions. In this regard, Exicom is deployed in India, Southeast Asia, and Africa. These DC power systems are specially designed and customised according to customers’ preferences for use at telecommunications sites like large offices, renewable hybrid sites, base station sites, and wi-fi sites.
Apart from the business verticals discussed above, Exicom has also established three subsidiaries outside India to capture a share of the global market.
- Exicom Tele-Systems Pte. Ltd. in Singapore
- Horizon Power Solutions DMCC in U.A.E
- Horizon Tele-System SDN BHD in Malaysia
The company holds two dedicated research and development centres and three manufacturing facilities in India with a capacity to manufacture 12,000 DC Power Systems, 44,000 AC Chargers and DC fast chargers.
The business is supported by an employee base of 1,124 in India and 43 employees at the company’s subsidiaries.
Did you Know?
Exicom has deployed 450,000 Li-ion batteries for use in the telecommunications sector.
IPO Details
- Exicom Tele-Systems IPO is a book-built issue of INR 429 crores. The issue is a fresh issue of INR 329 crore and an OFS of 100 crore.
- The IPO will open for subscription on February 27, 2024, and will close on February 29, 2024.
- The allotment date for the IPO is fixed on Friday, March 1, 2024.
- The tentative listing date of the company on the stock exchange is Tuesday, March 5, 2024.
- The price band for the IPO is fixed at INR 135 to INR 142 per share. The minimum lot size for the application of the IPO is 100 shares.
- The minimum amount of investment for retail investors is INR 14,200.
- Monarch Networth Capital Limited, Unistone Capital Private Limited, and Systematix Corporate Services Limited are the book-running lead managers.
Objective of the Issue
- Repay/prepay the borrowings either in part or in full.
- Investment in research & development and general corporate purposes.
- Partial funding for the needs of working capital.
| IPO Date | February 27, 2024 to February 29, 2024 |
| Price Band | INR 135 to INR 142 per share |
| Lot Size | 100 Shares |
| Fresh Issue | 23,169,014 shares |
| OFS | 7,042,200 shares |
| Issue Type | Book Built Issue IPO |
| IPO Type | Main-Board IPO |
| Allotment Date | Friday, March 1, 2024 |
| Initiation of Refunds | Monday, March 4, 2024 |
| Listing Date | Tuesday, March 5, 2024 |
Financial Summary & KPIs
Financial statement highlights of the company (Y-o-Y basis)
| Particulars | FY 2023 | FY 2022 | FY 2021 |
| Revenue From Operations | 707.9 | 842.8 | 512.9 |
| Total Expenses | 690.9 | 809.2 | 511.5 |
| Net Profit | 6.4 | 5.1 | 3.4 |
| Borrowings | 117.9 | 107.7 | 101.7 |
| Total Current Assets | 574.5 | 433.2 | 528.1 |
| Total Current Liabilities | 369.1 | 277.4 | 368.4 |
| EBIT Margin (in %) | 5.1% | 6.2% | 3% |
| Basic EPS (in INR) | 0.69 | 0.56 | 0.38 |
Key Performance Indicators (KPIs)
| KPIs | FY 2023 | FY 2022 | FY 2021 |
| Gross profit (in INR crore) | 175.22 | 179.11 | 116.24 |
| Gross profit margin (%) | 24.75% | 21.25% | 22.66% |
| EBITDA (in INR crore) | 52.43 | 67.42 | 29.51 |
| EBITDA Margin (%) | 7.41% | 8.00% | 5.75% |
| Profit after Tax from continuing operations | 31.02 | 30.39 | 12.67 |
| PAT Margin (%) | 4.38% | 3.61% | 2.47% |
| ROCE (in %) | 10.92% | 17.66% | 5.33% |
Strengths
- Exicom is a market leader with an early-mover advantage in the Indian EV market, with a market share of 60% and 25% in the residential and public charging domains.
- Exicom’s in-house R&D facilities and manufacturing units allow them to control the entire product development process, ensuring quality, efficiency and customisation capabilities.
- With over two decades of experience in the power solutions sector, Exicom enjoys established relationships with institutional and corporate clients, showcasing their expertise in timely delivering projects.
- The company has a strong track record of financials, and its recent IPO aims to raise capital for further expansion and development, indicating a positive outlook for the company.
- As the EV market in India continues to increase, Exicom’s diverse product portfolio catering to the diverse needs of customers positions them to capitalise on the growing demand.
Weaknesses
Besides its strengths, Exicom Tele-Systems also faces several risks that investors should consider before making investment decisions.
- The Indian EV charging market is rapidly increasing and becoming increasingly competitive, with established players from the power and automotive industries entering the segment. New startups are also eyeing for market share, thus forcing Exicom to maintain its competitive edge.
- The EV technology is consistently evolving with new standards and functionalities emerging. Exicom needs to continuously invest in R&D to ensure its products remain relevant and competitive in the long run.
- The company’s recent revenue decline and relatively low-profit margins can be points of concern. However, the company’s ability to manage debt will be crucial for future growth.
- The Indian government plays a significant role in shaping the EV Industry through policy decisions and subsidies. Any substantial regulation change could impact Exicom’s business model and profit margins.
Conclusion
Exicom possesses a firm foundation with an early mover advantage, vertical integration, and domain expertise. In the future, their diversified product portfolio and recent IPO position will help them to capitalise on the growing EV market in India.
Exicom Tele-Systems can be a good option for investors interested in the future of the Indian EV landscape. The company’s ability to mitigate risks and capitalise on its strengths will decide its success in the coming years.
Frequently Asked Questions (FAQs)
1. What does Exicom Tele-Systems do?
Ans. The company provides power solutions and EV charging to a diversified customer base.
2. Exicom witnessed a decline in revenue in FY23; is this a red flag in the IPO?
Ans. The company saw a decline in revenue in FY23;. At the same time, this may seem like a major weakness of the management, the decision to invest should be taken after a thorough analysis of the company.
3. Why is the company going public?
Ans. Exicom is going public to raise funds to expand its business operations and repay the borrowings.
4. What makes the company special?
Ans. Exicom got a head start in the EV race. They design and build their chargers through an in-house manufacturing facility and have a proven track record of being a market leader.
5. Is Exicom Tele Systems a main-board IPO?
Ans. Yes, Exicom Tele-systems IPO is raising INR 429 Crores, thus making it a mainboard IPO.
Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.
