Exicom Tele-Systems Limited IPO: Powering Up Your Investment Portfolio?

Exicom Tele-Systems Limited, a specialist in power systems and electric vehicle (EV) charging solutions, launched its IPO on February 27th, 2024. Should you join the charging revolution and invest? Let’s explore. 

About Exicom Tele-Systems 

Exicom Tele-Systems Limited provides power management solutions across two business verticals. The company offers smart charging systems for residential, commercial, and public use in India, as well as critical power solutions for energy management at telecommunications and enterprise sites in India and abroad.  

Established in 1994, Exicom has deployed over 6,000 AC and DC chargers in India and Southeast Asia. Their EV charging solutions are designed to withstand harsh environmental and electrical conditions. As of March 31, 2023, the company is one of the first to enter the EV charger manufacturing segment in India. The company’s customer base includes established automotive OEMs (for passenger cars and EV buses), charge point operators (CPOs), and fleet aggregators. 

A key competitor in the EV charger manufacturing space is Fortum India Limited. 

IPO Details 

• Subscription Dates: February 27th – February 29th, 2024 
• Price Band: ₹135 – ₹142 per share 
• Minimum Investment: ₹7,035 (50 shares) 
• Listing: BSE and NSE 

Offer Breakup 

The IPO comprises a fresh issue of ₹329 crore and an Offer for Sale (OFS) of ₹100 Crore by the promoter NextWave Communications. 

IPO Objective 

• The funds raised will be used for: 
• Financing assembly lines at their manufacturing facility. 
• Repayment of debt. 
• Funding working capital requirements. 
• Investment in research and development (R&D). 
• General corporate purposes. 

IPO Strengths 

• Exicom leads the Indian EV Charger industry with 60% residential and 25% public market shares. They’ve installed 35,000 chargers across 400 locations, serving OEMs, owners, CPOs, and fleets. 
• Exicom operates with vertically integrated processes, encompassing product development from concept to design, engineering, and prototype testing. Supported by two R&D centers, manufacturing facilities in Solan and Gurugram India, produce DC Power Systems and EV Chargers. 
• As of March 31, 2023, our Company has deployed 450,000 Li-ion Batteries for application in the telecommunications sector, equivalent to a storage capacity of over 2.00 GWH. 
• The company has strived to expand its portfolio to serve all EV segments, emphasizing bus charging. They plan to enhance their product range by introducing high-power EV charging solutions up to 480 kW. 
• The company primarily serves the Indian market for its Critical Power Business and EV Charger Business. However, they aim to capitalize on their track record by expanding their customer base across various geographical regions. 
• The company plans to expand its product portfolio, offering differentiated solutions to customers, leveraging its experience to enhance industry positioning. With EV adoption rising, the global demand for charging infrastructure is projected to grow significantly. 

IPO Risks 

• The electric vehicle supply equipment business (“EV Charger Business”) is correlated with and reliant upon the ongoing rapid adoption and demand for electric vehicles (“EVs”). 
• The company derived over 50% of its revenue from operations in each of the last three financial years from customers in the Indian telecommunications sector. Adverse changes in this sector could negatively affect its business, operational outcomes, and financial status. 
• The company has significant working capital requirements. In the event of insufficient cash flows to fund these needs, it could adversely affect their business, cash flows, and operational results. 
• The company relies on global suppliers for raw materials and key inputs, with limited ability to reduce import dependence. Shortages or unavailability of critical components may cause manufacturing and delivery delays, impacting business operations. 
• The EV Charger solutions business benefits from fiscal and non-fiscal incentives, tax benefits, and government schemes aimed at fostering EV industry growth. Any changes or reversals in such schemes may adversely affect operational results and financial conditions. 
• The company’s reliance on R&D for product innovation is essential, and failure to keep up with industry trends, technological advancements, and customer preferences may negatively impact business performance. 

Financials 

Our outlook 

The company has strategically expanded its operations into the EV Charger and Critical Power businesses, leveraging its extensive experience in power conversion and energy management. It intends to capitalise on the growing market opportunities in the electric vehicle charging infrastructure and telecommunications power sectors by focusing heavily on innovation and product quality. The company’s commitment to R&D, combined with its recognition of sustainable energy solutions, positions it well to capitalise on the accelerating shift toward electrification and rising demand for dependable power solutions. 

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