Drone Destination IPO: Final Subscription Status

Drone Destination IPO closed on Thursday, 13th July 2023. The IPO had opened for subscription on 07th July 2023. Let us look at the final subscription status of Drone Destination Ltd at the close of subscription on 13th July 2023. But, before that here is a quick rundown on the business model of Drone Destination Ltd.

A quick word on Drone Destination Ltd and the SME IPO

Drone Destination Ltd, is an SME IPO on the NSE which opened for subscription on 07th July 2023. Here is a quick background of the company. Drone Destination is a DGCA (Directorate General of Civil Aviation) authorized Remote Pilot Training Organization. Along with its sister company, Hubblefly Technologies, they have jointly developed an integrated and comprehensive drone eco-system which is predicated on drone manufacturing, certified training, services, and rent a drone services. Drone Destination Ltd is manned by a team of Aviation & Drone Experts with a combined experience of over 350 man years. Its flagship training centre is located at Manesar.

The company runs the largest network of DGCA-certified Drone Pilot Training Programs and has trained over 1,000 drone pilots till date. It operates 8 Drone Hubs and plans to use the IPO funds to open another 150 Drone Hubs, over the next three years. These drone hubs will offer drones on rent, with certified pilots, drone enterprise solutions, repair, and maintenance support as well as specialised training on the operation of drones. It has currently deployed 25 drone teams to conduct village level mapping across 3 major states of UP, Gujarat and Andhra Pradesh. Drone Destination is a play on the growing UAV industry.

Quick word about the Drone Destination Ltd IPO

The ₹44.20 crore of Drone Destination IPO comprises entirely of a fresh issue and there is no offer for sale component. The total SME IPO of Drone Destination Ltd entails issue of 68 lakh shares which at the upper band of the price range at ₹65 per share aggregates to ₹44.20 crore. The stock has a face value of ₹10 and the price band is ₹62 to ₹65. The retail bidders can bid in minimum lot size of 2,000 share each. Thus, the minimum investment of ₹130,000 in the IPO is the base limit. That is also the maximum that a retail investor can apply for in the IPO.

HNIs can invest in 2 lots of 4,000 shares worth ₹260,000 as the bare minimum investment. There is no upper limit for the HNI / NII category. Drone Destination Ltd will deploy the funds buying new drones, new vehicles and for other capex and working capital needs. Post the IPO, the promoter equity in the company will get diluted from 85.14% to 62.31%. The issue is lead managed by Narnolia Financial Services Ltd, while Maashitla Securities Private Ltd will be the registrars to the issue. Let us now turn to the final subscription details of the IPO as of the close of subscription on 13th July 2023.

Final subscription status of Drone Destination Ltd

Here is the subscription status of the Drone Destination Ltd IPO as at close on 13th July 2023.

The issue was open for retail investors, QIBs and for the HNI / NIIs and the subscription response as can be seen from the table above has been phenomenal. There was a broad quota designed for each of the segments viz. the QIBs, the retail and the HNI NII. The table below captures the allocation reservation done for each of the categories out of the total number of shares offered in the IPO.

The anchor portion of 18.88 lakh shares was spread across 5 anchor investors. The anchor allotment was done on 06th July 2023 and details are as under. The 18.88 lakh shares were allocated to the anchor investors as below at the upper end of the price band at ₹65.

The oversubscription of the IPO was dominated by the HNI / NIIs and the retail investors almost in equal measure while the QIB subscription were relatively more modest. The table below captures the day-wise progression of the subscription status of Drone Destination Ltd as of the close of the last day of the IPO. The IPO was open for a full 5 days.

It is clear from the above table that the retail portion, the HIN / NII portion and even the QIB portion got fully subscribed on the first day of the IPO itself. As a result, the overall subscription was already 9 times at the end of the first day itself. All the 3 categories of investors viz., HNIs / NIIs, retail and QIB categories saw good traction and build up of interest on the last day of the IPO. There is an allocation of 500,000 shares to Nikunj Stock Brokers and Share India Securities for market making, which has been carved out separately.

The IPO of Drone Destination Ltd opened for subscription on 07th July 2023 and closed for subscription on 13th July 2023 (both days inclusive). The basis of allotment will be finalized on 18th July 2023 and the refunds will be initiated on 19th July 2023. In addition, the demat credits are expected to happen on 20th July 2023 and the stock is scheduled to list on 21st July 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.