Ramco Systems recently hired CEO, Sundar Subramanian, focused on the company’s intention in establishing India’s defence sector in an exclusive interview with ET. Specifically, they are eyeing the maintenance, repair, and overhaul (MRO) segment.
The corporation as well as the Indian defence sector may be significantly impacted by this truly intriguing development.
Why is Ramco Systems Interested in the Indian Defense Sector?
The Indian government has been actively promoting indigenous manufacturing infrastructure in the defense sector. They’ve introduced policies, such as the Defense Offset Policy, which requires foreign vendors to invest a minimum of 30% of the contract value in the Indian defense sector.
Ramco Systems sees this as an opportunity to support foreign original equipment manufacturers (OEM) in meeting this obligation through their software deployments.
Ramco Systems:Raising Funds for the Bold Move
To support their entry into this promising sector, Ramco Systems recently received approval from their board of directors to raise funds amounting to ₹160 crore.
This will be achieved by issuing equity shares and warrants on a preferential basis through private placement. The issue price for these shares and warrants is set at a premium compared to the current market price.
Who Will Benefit from This Investment by Ramco Systems ?
The warrants will be issued to promoter P R Venketrama Raja, while the equity shares will go to the promoter group Ramco Industries, as well as non-promoter investors Atyant Capital India Fund – I and Vanderbilt University, total four investors are involved in this deal.
An Examination towards the Demands
Each warrant is exercisable into one equity share with a face value of ₹10 each, and they will have a tenure of 18 months from the date of allotment.
These warrants can be converted in one or more tranches. Additionally, the equity shares and warrants will be subject to lock-in periods as prescribed by SEBI ICDR Regulations.
A Brief Introduction about Ramco Systems
A well-known brand in the commercial software industry is Ramco Systems.
In spite of the fact that they face monetary hardships, their imaginative thoughts and space for development make them a firm to watch in the business programming and guard administrations ventures.
They give a scope of business programming programs, like M&E MRO for Flight, Worldwide Finance, ERP, and Operations.
These applications are especially functional for associations since they are cloud-based and cell phone viable.
current financial highlights
For the first quarter of the fiscal year 2023-24 (ending June 30, 2023), Ramco Systems reported global consolidated income of USD 17.13 million (Rs. 139.9 crore).
However, they also posted a net loss after tax of USD 5.72 million (Rs. 46.8 crore) for the same period.
However, there are some positive indications that give us hope:
Quarterly order booking reached USD 23.14 million.
They signed four “Million-Dollar plus” deals in various business units.
Global insurance companies and leading aircraft manufacturers trust Ramco for their operations.
Revenue showed a positive momentum with an 11% increase quarter-on-quarter.
Ramco Systems’ share price recently rose by nearly 5%, coinciding with the announcement of their wholly owned subsidiary in Qatar.
Expanding into Qatar
Ramco Systems has had amazing growth with the entry into Qatar. They need to help and change organisations in areas including ERP, HR, and finance with the assistance of their new Qatari auxiliary.
Ramco has a ton of opportunities to set its situation as a critical corporate programming supplier in Qatar, one of the Center East’s quickest developing countries.
Local businesses who want to embrace digital transformation as well as their present customers stand to gain from this approach.
It’s important to note that while Ramco Systems reported a widened consolidated net loss of ₹45.40 crore during the quarter ending March 2023, compared to ₹26.45 crore in the same quarter the previous year, their total income did increase from ₹125.24 crore to ₹128.26 crore year-on-year.
For the full fiscal year 2023, the company reported a consolidated net loss of ₹206.86 crore, up from ₹72.93 crore the previous year. The total revenue for the year dropped from 540.37 crore the year before to 497.73 crore.
They intend to grow into Qatar as well as the Indian defence industry, which may be quite significant for them.
They’re getting ready to support international OEM vendors and drive digital changes in these regions.
Although they face financial difficulties, their creative ideas and room for expansion make them a firm to watch in the commercial software and defence services industries.