In a regulatory filing, DroneAcharya announced that it has inked a term sheet for a “strategic company merger” with agri-drone business AITMC Ventures. DroneAcharya did not, however, provide any other information regarding the deal. The two businesses will collaborate to provide their clients with industrial, enterprise, defence, and spacetech solutions, according to a LinkedIn post by DroneAcharya. Additionally, it stated that these solutions will include industry-leading software, hardware, automation, capacity building, and skill development products. According to DroneAcharya’s post, this proposed merger is a game-changer for both businesses and will allow India to establish new industry standards on the world map.
DroneAcharya’s Order Book
Additionally, the board of the publicly traded drone firm authorised the implementation of an Employee Stock Option Plan (ESOP) policy. DroneAcharya stated earlier this week that it has secured a contract with the defence ministry for INR 7.53 lakh to offer training courses focused on drones. Eight Indian Army officials will receive drone pilot training and drone construction training from the company in accordance with the contract. In addition, the business released many important announcements in December. This included partnering with Canada’s drone startup Volatus and establishing a new subsidiary as part of a strategic move into the Middle East.
Financial Outlook of DroneAcharya
In terms of finances, DroneAcharya’s profit for the six months ending in September 2024 (H1 FY25) decreased by 62.1% to INR 1.50 Cr from INR 3.96 Cr during the same time the previous year. Nonetheless, operating revenue increased 28.8% to INR 26.90 Cr in the reviewed year from INR 20.88 Cr in the first half of FY24. The agri-drone company AITMC Ventures, run by AVPCL, is present in 12 states and has 50 Global Incubation and Skill Hubs (GISH) and 20 World Incubation and Skill Hubs (WISH) that are only focused on the drone and agricultural industries. The company, which was founded in December 2016 by Deep Sisai and Preet Sandhuu, provides drone training as well as other agricultural skill development programs. In October 2023, the business submitted its draft red herring prospectus (DRHP) to NSE Emerge for an IPO. Nevertheless, there have been no further developments about the IPO.
Performance of Drone Startup Sector in India in 2024
Due to rising demand from a variety of industries, including e-commerce, defence, and agriculture, the drone market in India is expanding quickly. The sector has grown even more as a result of encouraging government policies and programs like the Drone Shakti plan. Investments are booming, with large sums of money going to R&D and startup ecosystems that focus on cutting-edge drone technologies.
At a compound annual growth rate (CAGR) of 17.0%, the India drone market is expected to increase from USD 654 million in 2024 to USD 1,437 million by 2029. It is anticipated that the number of drones in the Indian drone market will increase from 10,803 units in 2024 to 61,393 units in 2029.
This includes improvements in battery life and long-range capabilities, both of which are essential given India’s enormous and varied geography. Additionally, the market is changing from mainly military applications to a wide range of commercial purposes, such as healthcare for the delivery of medical supplies, urban planning for smart city projects, and agriculture for crop assessment. Due to their creative approaches to drone technology, many firms have emerged as frontrunners in the dynamic entrepreneurial landscape.
Ever wondered what Reverse Merger means, even though it appears all over the internet? Well, in simple words, it is nothing but a private company holding ownership over already public companies. In this way, the private stocks and assets are now available to the general public.
To understand Reverse mergers thoroughly, one has to understand what IPO means. Initial Public Offering or IPO is a process of offering a private corporation’s share to the public in a new stock issuance.
Here both the private, as well as public parties, are benefitted, such that, Private investors obtain shares through the primary market, whereas, public investors get a chance to be a part of this globalized offering.
To understand Reverse mergers in-depth, shall we dive in deeper? A reverse Merger is also known as a Reverse Takeover or reverse IPO. It is one of the efficient ways in which a private company can go public and monetize its share effectively.
To put it in more simple words, this process is a blessing in disguise for a weaker or smaller company, that wants to acquire a bigger company. Similarly, it is a reverse merger, when a parent company merges with its subsidiary, or when a company that is losing money acquires a company that is profitable. So, in order to enjoy these perks, a few processes are to be undergone, which are listed below:
Identification of a Suitable Shell Co.
Recruiting Financial Staff
Financial Audits
Transaction Documents like a letter of intent, agreement, super 8-k
Issuance of Stock Certificates
Advantages of Reverse Merger
A simple process
A reverse merger is quite a simple process compared to IPO. It takes only a few weeks for a company to become public without raising capital under this process. Meanwhile, IPO does take a lot of months to complete the merging process, but, in the case of reverse mergers, it can be done within thirty days. And for its time and safety management, several companies prefer reverse merging to IPO.
Less risk
IPO is an uncertain process, which cannot assure that a company will go public in the end. However, a reverse merger can promise you that. Because, whenever, stock market conditions fluctuate, the time invested by the managers associated with IPO, in the deal also extends until a favourable outcome is ensured. Accordingly, a reverse merger is a time-saving process, so eventually, it will take down the risk of non-use.
A less reliant on the market
IPOs are considered to be a combination of the public offering and the capital raising function. By virtue of reverse mergers being the only mechanism for converting private companies into public companies, the process is less dependent on market conditions (because the company does not need to raise capital).
In a reverse merger, market conditions are not relevant since the offering is simply a conversion mechanism. In other words, the process attempts to capitalize on the benefits of being a publicly-funded organization.
Perks of a public company
Public companies have a high amount of revenues, which in turn is a key feature to consider converting into one. Over and above, the company’s securities then enjoy higher liquidity when they are traded on an exchange.
By gaining the opportunity to sell their interests, the original investors have a handy exit option other than having the corporation purchase back their shares. Since management may now issue extra shares through secondary offers, the firm has better access to the capital markets.
If stockholders had warrants, which give them the power to buy more shares at a certain price, exercising those rights would bring more money into the firm.
Disadvantages of Reverse Merger
An extensive investigation is needed
It is important to go through every nook and corner of the private and public companies before starting the merging process. Starting from looking into their motives to checking whether the company is neat and clean, pending liabilities, or other things that might disturb the merging. It is therefore imperative to conduct appropriate due diligence and to expect transparent disclosure (on both sides).
Dump of risky stocks
After the merger, the stock price may or may not suffer significantly if the public shell’s shareholders sell a sizable amount of their shares. So it is a must-need merger agreement to have clauses defining necessary holding periods, subsequently, lessening or completely eliminating the possibility that the shares will be dumped.
Insufficient demand shares
There is no assurance of the investors obtaining sufficient liquidity after the merger. Due to financial and operational crises, sometimes, small companies may not be ready to be in public.
In the wake of the reverse merger, the original investors may find that their shares are little in demand. Therefore, a company itself needs to be financially and operationally attractive to be a desirable investment to potential investors for its shares to be worthy.
Regulatory and compliance complexities
Inexperience managers sometimes can harm a potential private company’s journey to a publicly-traded company. In other words, when managers spend a great deal of time on administrative concerns rather than running their businesses, they can result in a stagnant and underperforming company.
In 1994 Godrej Soaps, a consumer product manufacturing business did a reverse merger with its loss-making subsidiary unit ‘ Gujarat Godrej Innovative chemical’ and named it ‘Godrej Soaps Ltd’.
ICICI Bank, India
ICICI merger with ICICI Bank
Only a few Indian companies have used the reverse IPO, making the reverse merger concept relatively new to India. In 2002, ICICI became the first firm to choose a reverse merger when it merged with its arm company, ICICI Bank, and renamed the combined entity ICICI Bank. ICICI also had two subsidiaries, ICICI Personal Financial Services Ltd. and ICICI Capital Services Ltd.
In order to offer both urban and rural consumers a wide variety of loan services, the ICICI group made the decision to do a reverse turnover. As a result, we could see the new venture’s profitability. ICICI Bank is now among the top financial institutions around the globe.
IDBI Bank
In 2005, the Industrial Development bank of India followed the reverse merge method with its commercial bank IDBI Bank.
IndiaBulls
Indiabulls merger with Indiabulls Housing Finance
Later in 2013, Indiabulls financial services Ltd consolidated capital with its subsidiary Indiabulls housing finance Ltd
REO Motor Car Company
REO merger with Nucor
Ransom E. Olds created an automotive manufacturing firm in 1905; by 1907, it had $4.5 million in total sales and was regarded as one of the richest automakers. The corporation itself turned into a tax loss carryover following the great depression that hit Western nations, and the company’s dissident shareholders coerced it to perform a reverse turnover in order to secure a respectable revenue by buying a minor publicly-traded company called Nucor.
New York Stock Exchange
NYSE merger with Archipelago Holdings
One of the world’s oldest and largest stock exchanges, which is situated on Wall street, New York city since 1792. NYSE had a reverse merger with Archipelago Holdings to go public in 2006.
Aerospatiale
Aerospatiale merger with Matra
Launched in 1970 and operating as a State-owned corporation until 1998, Aerospatiale is primarily known as an aerospace and defense manufacturing company. In order to reclaim its previous status in the market—that of a public limited company—Aerospatiale reverse-merged with Matra’s defense division to create Aerospatiale-Matra.
ValuJetAirline
ValuJet merger with AirTran
An airplane manufacturing company established in 1992 that regularly operates international flights in the eastern United States and Canada. The company experienced many aviation crashes in 1996, which contributed significantly to the company’s downfall. The following year, the corporation bought a tiny company called AirTrainAirways and renamed the new company “AirTrainAirways” to increase its customer base again.
US Airways
U.S Airways merger with America West Airlines
It was founded in 1937 and ceased its operation after the airline company went insolvent in the early 2000s. Later, the government filed for ‘chapter 11 bankrupt’ permitting the airline to reorganize. That’s when American West Airlines was acquired with the goal to remove the chapter 11 bankruptcy in 2005.
ABC Radio
ABC merger with Disney
American Broadcasting Company was an American radio network that was reverse merged with Citadel Broadcasting corporation to spin off its former parent- Disney in 2007.
CBS Radio
CBS merger with Entercom
One of the renowned news radio networks, which was launched in 1928 has more than 1000 radio stations in the United States of America. In February 2017, CBS acquired a majority of shares in Entercom and acquired it for the purpose of spinning off its former parent CBS radio.
T-mobile US
T Mobile merger with MetroPCS
It is an American public wireless telecommunication corporation, which is owned by its parent German telecommunication company- Deutsche Telekom (DT). Later, the company had a reverse IPO with MetroPCS, an American prepaid wireless service provider.
VMWare
VMWare merger with Dell
It is an American cloud computing and virtualization technology company, founded in 1998 by Mendel Rosenblum, Diane Greene, Scott Devine, Ellen Wang, and Edouard Bugnion. VMWare did reverse turnover with Dell, an American technology enterprise for a price with a plan to be back as a public company in the stock market.
Eddie Stobart
Eddie Stobart merger with Westbury Property
Eddie Stobart commenced as an agricultural business in the mid-19th century, which was later turned into the largest privately-owned transport & distribution company by William Stobart and Andrew Tinkler in 1976.
Eventually, the company demerged with two separate public enterprises- Stobart Group and Eddie Stobart Logistics to function their operations under one company ‘Eddie Stobart Logistics’.
In 2007, Westbury Property fund purchased Eddie Stobart Logistics for £137.7 million: £62 million in cash and £76 million in new Westbury Property Fund shares that made Eddie Stobart gain stock market listing.
Fisker Inc.
Fisker Reverse merger with Spartan Acquisition
Recently, in 2020, the famously known American electric vehicle automaker which was established by Henrik Fisker and his wife Geeta Gupta Fisker in 2016 decided to go public after reverse merging with Spartan Acquisition corporations.
On September 22, the board of Zee Entertainment Enterprises (ZEEL) accepted a non-binding term sheet with Sony Pictures Networks India to consolidate their businesses, with Sony’s promoters investing Rs 11,615 crore ($1.57 billion) in the merged entity as growth capital, making it India’s most extensive entertainment network with approximately $2 billion in revenues and a 26% viewership share. The statement resulted in a 9.99 per cent increase in Zee stock.
Following the infusion of growth money, ZEEL shareholders own around 47 per cent of the combined company, while Sony India promoters own 53 per cent.
Zee-Sony Merger – Division of the Shares and Profits
Punit Goenka- CEO of ZEE
Based on the current anticipated equity values of ZEEL and Sony India, the stated merger ratio would have been 61.25 per cent in favour of ZEEL.
In exchange for current ZEEL backers and their affiliates pledging not to compete with the combined firm, Sony India’s promoters agreed to transfer roughly a 2% interest in the merged entity. The Subhash Chandra family would own 4% of the amalgamated business, which established India’s first private sector entertainment network, with the opportunity to grow their holding to 20%. The family liquidated their ZEEL shareholding to repay Rs 13,000 crore in loans from Indian banks for failed diversifications such as infrastructure projects.
While Sony’s promoters will have the right to appoint the majority of the board’s directors, Punit Goenka, ZEEL’s CEO and MD will lead the amalgamated firm.
The nomination compensation committee, the board of directors, and the shareholders of the combined firm must all approve Goenka’s appointment.
Sony Pictures N is attempting a deal with ZEE for the second time. SPN was one of the few shortlisted strategic investors with whom ZEE was negotiating to sell the promoters’ shareholding and infuse funds for development.
ZEE could not reach an agreement with a strategic investor in 2019 and was obliged to settle for a financial one due to a liquidity shortage. Even though most of the promoters’ debt had been paid off, the firm still needs development capital.
During the lockdown, ZEE was considering various funding possibilities, including loans, as it is a debt-free firm. However, the board of directors and promoters believe that a strategic investor will be the first choice.
According to those familiar with the situation, when the transaction with ZEE fell through owing to value issues, SPN attempted to combine with Viacom18. That contract fell through in October of last year, and SPN’s parent business began hunting for new partners, they added.
Due to the rough treatment of stockholders, the purchase was likely to face legal challenges, with the Subhash Chandra family receiving an extra 2.1 per cent stake from Sony promoters as a non-compete fee.
Zee-Sony Merger – Challenges Companies may confront
The merger conditions include a non-compete agreement between the ZEEL promoters and Sony Pictures Networks India, with the ZEEL promoters receiving an additional 2.1 per cent interest in the combined firm.
Obtaining ZEEL shareholders’ approval for the planned merger and the continuance of ZEEL’s MD and CEO as the head of the merging company for the next five years may also pose hurdles, considering the tense relationship between certain institutional owners of ZEEL and the ZEEL board.
However, the amalgamated entity’s planned structure’s board of Directors may assuage institutional shareholders’ worries. Because the Sebi Takeover Code exempts the acquisition of interest via a Scheme of Arrangement for amalgamation/merger, there will be no open offer for ZEEL shares.
The sale was accelerated when Invesco, one of ZEEL’s significant owners, requested an emergency general meeting within three weeks to remove Goenka. After proxy advice companies reported corporate governance issues in the business that ZEEL later funded, two directors, Manish Chokhani and Ashok Kurien resigned from the ZEEL board.
Zee-Sony Merger – How is it Beneficial for Both Companies?
Analysts estimate that the transaction will create a new media and entertainment powerhouse in India, with revenues of Rs 15,000 crore.
According to analysts, the deal is a strategic match since Sony is a big player in the Hindi general entertainment channel (GEC) market, mainly non-fiction. Zee is strong in movies of all genres and the regional GEC area. Zee has a 17% network viewing share, whereas Sony has a 10-12% share. As a result, it would be a solid strategic match in broadcast, digital, and content.
In terms of synergies, Sony is performing well in sports and mainstream GEC, but Zee has a high recall on regional genres, which Sony has less of or none of. Sony’s foreign repertoire would be available for ZEE to exploit and monetize.
With this acquisition, ZEE Entertainment’s corporate governance issues should be resolved, boosting investor trust. Both companies have a robust film library that can be exploited for OTT and TV offerings. The combined firm will be better positioned to compete with Disney on both the distribution and advertising fronts.
According to Zee’s annual report, its network in India connects over 3,000 brands with their customers.
According to ZEEL’s aggregated figures, the company made a profit of Rs 800 crore on revenues of Rs 7,730 crore in the fiscal year ending March this year.
In March 2020, Sony Pictures Network India made a profit of Rs 976 crore on revenues of Rs 5,846 crore, with cash on books of Rs 11,000 crore.
Following the announcement of the merger, ZEEL’s shares soared 32% to Rs 337 per share, valuing the company at Rs 32,378 crore.
ZEE and SPN are two of India’s most popular media and entertainment companies, having strong consumer appeal across genres, languages, and platforms. The combination of these two companies will bring together the media industry’s most powerful leadership teams, content creators, and high-quality series and film libraries, resulting in a combined content platform that can compete with domestic and global platforms while also accelerating the region’s digital transition.
FAQs
Is Sony and ZEE merging?
Zee had announced merger with Sony on September 22.
Who is the owner of Zee Entertainment?
News Corporation is the parent organization of Zee Entertainment and owns it.
With this world of choices, Android phones were always welcomed and entertained within the population. It provides a bigger and variety of options to choose from, which are liked by a lot of people. But, what if two highly appreciated and popular brands, with an impressive selling range, combine and become the same.
To be precise, this is exactly what is going to happen in this newly modified android phone, by the merger of OnePlus and Oppo. The recent news that creates this buzz is that OnePlus is heading towards deeper integration with its overseas parent company, Oppo. And, there are several predicted jaw-dropping chances that this could shake up the Android smartphone industry’s landscape.
Before taking a deep insight into this actual cause, let’s understand what are the key factors which can get affected and mainly positively changed, by this merge. So, they are:
1. Production of better-quality product 2. Making potentially cheaper production 3. Creating faster and hassle-free products 4. Making variety of other devices
Oneplus merger with Oppo
Better Quality Production
OnePlus has achieved a lot of fame and reputation in recent years, since 2014, when it launched its first one. But now we can expect a bigger change in the production in the company, with the merger with Oppo.
However, the OnePlus CEO didn’t mention the word merge while announcing it, rather he mentioned it as, OnePlus has decided to further integrate their association with Oppo. But somehow, it also indicates that it is going to affect the production of the company. Now, it’s predictable that the lags and the troubles which the users of both companies faced are going to wave out. This will mark the beginning of a new revolutionary process.
On the other note, they did also mention that, both the brands would be also working independently and singularly, creating their products, so we can expect both the companies to continue releasing phones.
Cheaper Products
Although OnePlus has given quite a difficult chase with the other smartphone brands, it has been an economical problem with the OnePlus. Like, other flagship phones are providing an ample amount of facilities, with a variety of choices, and now, OnePlus is initiating higher price money, to provide the same facility.
But with the merger with Oppo, it is quite clear that there will be a decrease in these products and they will be available at affordable prices. While indirectly will create a little more tension between other competitors, as by quality there is nothing to point a finger on the OnePlus flagship phones.
Faster and Hassle-free Products
With the ‘voice charging facility initiated in 2017, Oppo has a quite fair reputation of providing a faster charging facility with a huge amount of battery within it. Not only this but giving regular and fast software updates is also a primary feature in the Oppo UI smartphones. But, there is a little lack of this sincerity in the Oxygen OS, which is used in the OnePlus smartphones.
As the Oppo smartphones use Color OS, there is also a huge chance of software overlay with the same on the OnePlus smartphones too. However, it is not announced yet, but it is quite possible that the Oxygen OS, which is used in the OnePlus smartphones, may potentially switch to Color OS, which Oppo uses. At this point, this prediction is not that sure, but if this takes place, then this would have a huge impact on the Android industry landscape.
We are predicting this because, already in China, the OnePlus 9 range has started using the Color OS, and it’s not that far to get implemented by the merging later on. Alternatively, it can also be like the two interfaces may become more similar and maybe nothing great would change, and if anything changes, it would be a very subtle variation.
But it is quite sure that it would help improve OnePlus’s efficiency, the software updates would be arriving faster with the Color OS, and whenever they would come, they would not be the experimental beta versions, rather they would be more stable and fascinating.
Expansion in Variety of Products
OnePlus-Oppo Products
Getting the facts right, if anyone looks into it thoroughly, then it is easy to know that both OnePlus and Oppo are the subsidiaries of BBK electronics. Hence, they do already have a link. But this merger is going to begin an overseeing product strategy for both companies.
Oppo is not only producing smartphones, but also has a quite good hand in producing earbuds, earphones, smartwatches, fitness trackers, and other accessories too. So, this might help OnePlus in expanding its range from producing only smartphone and Bluetooth headsets to all these additional accessories.
Adding to that, we can also get a chance to see OnePlus making smartphones with faster-charging facilities, as Oppo has a giant gaze and experience in that field. With that, there is also a chance to create foldable and rollable OnePlus phones, as Oppo has already started experimenting with these super flexible devices.
Other Possible Impacts
Hence, there are the positive as well as not so positive impacts of the merger of OnePlus and Oppo, and the users can expect:
Frequent and stable software updates.
Interesting and new variable features.
Fast charging in the OnePlus phones like Oppo’s VOOC flash charge.
Slash in the prices of the OnePlus smartphones.
New and efficient different quality products from the brands, beyond smartphones.
Therefore, this might not seem like a very massive shift, but it’s almost sure to have some changes, and mostly they would come out as positives. This would somehow allow the two brands to streamline their operations and then capitalize them in the additional shared resources.
But whatsoever it’s a move that will align more with a company that will be looking to move more phones frequently, rather than just maintain exclusivity. Hence, this is quite a good development for the industry but it would create a little more tension and traffic within the industry as well.
FAQs
Has Oneplus merged with Oppo?
OnePlus has finally made its merger with Oppo and announced it publicly.
Is Oneplus and Oppo products of BBK Electronics?
OnePlus and Oppo are the subsidiaries of BBK electronics.
Which Operating system does Oppo uses?
ColorOS is a mobile operating system created by OPPO.
Which Operating system does OnePlus uses?
OxygenOS is an Android-based OS developed by OnePlus.
Nitin Konde
