C2C Advanced Systems IPO offers a fresh opportunity to invest in India’s growing defense and technology sector. The company creates cutting-edge solutions for defense, security, and industrial applications. With a strong focus on AI and machine learning, they’ve delivered Combat Management Systems for the Malaysian Navy. Their versatile technologies bridge military and civilian applications, making them an innovative player.
The Indian defense industry is undergoing significant changes. India is fostering innovation under the “Atmanirbhar Bharat” initiative. India plans to export defense equipment worth $15 billion by 2026. It will create a thriving market for companies like C2C Advanced Systems. With government support and increased private participation, defense exports grew by 334% in five years.
C2C Advanced Systems IPO aims to raise ₹99.07 crore to fund growth. The proceeds will support infrastructure upgrades in Bengaluru and Dubai, working capital needs, and new technologies. The IPO is priced at ₹214–₹226 per share. The company wants to scale its operations and contributing to India’s defense ecosystem.
Topics:
1. Primary Business
C2C Advanced Systems focuses on creating advanced technology solutions for defense and security. They specialize in building systems that help military and security organizations make better decisions in critical situations.
Their main expertise lies in designing software and hardware for tasks like:
- Tracking data in real-time,
- Analyzing big data using AI, and
- Machine learning, and upgrading old systems to meet modern warfare needs.
For example, they developed Combat Management Systems for ships in the Malaysian Navy. It is an acknowledgement of their capability to deliver defense solutions.
The company also works on innovative projects outside the defense sector. A few such projects for example are:
- Improving industrial systems with sensors and AI. This helps industries like transportation and manufacturing become more efficient.
They use lessons from military projects to create civilian technologies and vice versa. Their business model show how knowledge can flow between these two areas.
They focus on building “intelligent platforms.” It is their way to show that they can adapt their technologies to work with older and newer systems. It makes them versatile and valuable partners for modernization.
C2C Advanced Systems doesn’t manufacture hardware components like metal parts; instead, they “design the brains” of systems.
- Their work includes software and designs that integrate data from various sources, like sensors, to improve how decisions are made. Whether it’s for military missions or managing logistics in industries, they say, their technologies can work in tough environments.
- The can provide smart, efficient, and customizable solutions for defense and industrial applications.
2. About The Industry Prospects
The Indian Defence Sector is going through big changes. The government wants India to make more of its own weapons and military equipment. It is a part of the “Atmanirbhar Bharat” plan.
India spends the third most on defence in the world (as of 2021). India plans to sell military equipment worth $15 billion by 2026.
This means India is not only protecting itself but also helping other countries by selling defence tools.
In the Union Budget of 2022-23, the government decided to give 25% of its defence research budget to private companies and start-ups. This money will help in creating new ideas and technologies for the military. Private businesses are getting more involved in building India’s defence systems. By October 2022, 366 companies received 595 special licenses to make defence products.
India is also getting better at sending defence products to other countries.
Defence exports grew by 334% in five years. Now, India sells defence related items to over 75 countries. This happened because the government, private businesses, and research teams are working together.
This type of set-up is creating a good business environment for companies like C2C Advanced Systems.
3. Details of the IPO of C2C Advanced Systems
| Detail | Information |
| Type of Issue | Fresh Issue |
| Total Shares Offered | 43,83,600 Equity Shares |
| Face Value | ₹10 per Equity Share |
| Price Band | ₹214 to ₹226 per share |
| Total Issue Size | ₹99.069 crore (43,83,600 x 226) |
| Market Maker Reservation | 2,19,600 Equity Shares |
| Net Issue | 41,64,000 Equity Shares |
| Public Issue Percentage | 26.34% of post-issue paid-up equity share capital |
| IPO Open/Close Dates | 22-Nov-2024 / 26-Nov-2024 |
| IPO Listing Date | 29-Nov-2024 |
| IPO Lot Size (Retail) | 1 Lot [600 shares x 226 = Rs.1,35,600] |
| IPO Lot Size (HNI) | 1 Lot [1200 shares x 226 = Rs.2,71,200] |
4. Objective of The Issue
The company is raising money through this IPO to achieve several goals. Few of the primary goals are listed below:
- To buy new equipments, such as computers, software, and robotics. These will improve its ability to take on more work and deliver high-quality results faster. Some of this equipment will be used to upgrade their existing center in Bengaluru, while others will go to a new center in Dubai. This investment will make their operations more modern and efficient.
- Set up new office spaces in Bengaluru and Dubai. They will spend on furniture, flooring, and other interior fittings to make these spaces suitable for their growing staff and operations. In Bengaluru, they plan to create a training center to help clients learn about their products and see them in action.
- Needs more working capital. This money will help them pay for day-to-day expenses like materials, staff salaries, and handling big orders from clients. It will also prepare them for future growth. This step is crucial because the company has received large orders and needs funds to complete them smoothly. By raising money through the IPO, the company aims to support its current growth and future plans.
| Particulars | Amount (Cr) | % Utilization |
| Net Proceeds of the IPO | Approx. ₹90 crore (see calculation) | – |
| Towards purchase of Fixed Assets (both hardware and software) for our existing operations and Dubai Experience Centre | – ₹14.73 crore | 17% (approx) |
| Towards Fit-outs at our new premises at Bengaluru and Experience Centre at Dubai | – ₹4.58 crore | 5.0% (approx) |
| Towards security deposit for our new premises at Bengaluru | – ₹1.6 crore | 2% (approx) |
| Funding the working capital requirement of the Company | – ₹46 crore | 51% (approx) |
| General corporate purposes | – | 25% (Max) |
| Total |
5. Net Proceeds of the IPO (Estimation)
To calculate the Net Proceeds of the IPO, we use the following formula:
Net Proceeds = Gross Proceeds – Issue-related expenses.
Here, the Gross Proceeds can be calculated as:
- Fresh Issue Shares × Issue Price (Upper Band) = 4,383,600 shares × ₹226 = ₹99.07 crore (as mentioned in the details).
The Net Proceeds will depend on the subtraction of issue-related expenses, which hasn’t been provided in the details above. Without the exact expense amount, the net proceeds will be slightly less than ₹99.07 crore.
In general, IPO-related expenses could range between 5% and 10% of the Gross Proceeds. For estimation:
- If expenses are 5%, Net Proceeds ≈ ₹94.12 crore.
- If expenses are 10%, Net Proceeds ≈ ₹89.16 crore.
6. Pre-issue shareholding of the Promoters & Group
The promoters and promoter group of the company collectively hold 69,27,686 equity shares. It representing a 56.52% of the pre-issue paid-up share capital of the company.
These shares are distributed among the promoters and their group as outlined in the below table.
| Sr. No. | Particulars | Number of Shares | Percentage (%) |
| Promoters | |||
| 1 | C2C Innovations Private Limited | 21,00,000 | 17.13 |
| 2 | PVR Multimedia Private Limited | 36,41,944 | 29.71 |
| 3 | Lakshmi Chandra | 6,650 | 0.05 |
| 4 | Maya Chandra | 26,962 | 0.22 |
| 5 | Subrahmanya Srinivasa Narendra Lanka | 5,01,000 | 4.09 |
| 6 | Kuriyedath Ramesh | 5,01,000 | 4.09 |
| 7 | Murtaza Ali Sommar | 400 | Negligible |
| Total | 67,77,686 | 55.29% |
This distribution highlights the concentrated ownership structure within the promoter group, with significant holdings held by corporate entities.
7. Financial Statements of C2C Advanced Systems
| Particulars | As of 30-Sept, 2024 | FY 2024 | FY 2023 | FY 2022 |
| Equity Share Capital | 12.26 | 12.26 | 1.5 | 0.5 |
| Net Worth | 86.19 | 76.46 | 2.52 | -1.37 |
| Revenue from Operations | 43.22 | 41.06 | 8.05 | 0.35 |
| Profit After Tax (PAT) | 9.73 | 12.4 | 2.88 | -2.38 |
| Earnings Per Equity Share (Basic & Diluted) | 7.94 | 15.85 | 14.29 | -11.91 |
| Net Asset Value (NAV) Per Equity Share | 70.32 | 62.38 | 16.81 | -27.31 |
| Total Borrowings | 13.29 | 0 | 9.45 | 5.55 |
8. Price-To-Earning (P/E) Ratio (at IPO Price)
To calculate the Price-to-Earnings (P/E) ratio for the IPO, we use the following formula:
P/E = Issue Price / Earnings Per Share (EPS)
- Step 1: Identify the details
- Issue Price: ₹214 to ₹226 (Price Band).
- EPS: ₹15.35 (average EPS considering 2Q EPS of FY’25, and 4Q EPS of FY’24 and FY’23 respectively ).
- Step 2: Calculate P/E Ratio
- Lower Band (₹214):
- P/E = 13.94 [=214 / 15.35]
- Upper Band (₹226):
- P/E = 14.72 [=226 / 15.35]
- Lower Band (₹214):
- Final P/E Ratio:
- The P/E ratio for the IPO is in the range of 13.94 to 14.72.
This means investors are paying ₹13.94–₹14.72 for every ₹1 of the company’s earnings based on the latest financials.
9. Subscription Status of C2C Advanced Systems IPO
(Updated as of 22-nov-2024)
| Category | Shares Offered For Subscription | Shares Bid Received | X Times Subscribed |
| QIB | 8,32,800 | 4,44,000 | 0.53 |
| NII | 6,24,600 | 1,65,04,800 | 26.42 |
| Retail | 14,57,400 | 6,06,91,800 | 41.64 |
| Total | 29,14,800 | 7,76,40,600 | 26.64 |
[Note: Unlisted shares of C2C Advanced System were trading at a premium of Rs 245. The upper price band of this IPO is Rs 226. Hence, the Grey Market Premium (GMP) of this IPO is about 108.41%.]
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