Aditya Infotech is the largest Indian-owned company offering a comprehensive range of advanced video security and surveillance products, technologies, solutions, and services for enterprise and consumer segments. Its products are offered under the ‘CP PLUS’ brand which has strong recall value. It has a market share of 20.2% in the video surveillance industry in India in terms of revenues in Fiscal 2024. For these reasons, CP Plus IPO is an interesting public offer for investors.
Aditya Infotech delivers comprehensive security solutions, including fully integrated security systems and security-as-a-service offerings, catering to various sectors such as banking, insurance, real estate, healthcare, industrial, defense, education, hospitality, manufacturing, retail, and law enforcement. To enhance its product portfolio, the company has entered into a joint service arrangement with Dahua Technology, a global leader in video-centric smart IoT solutions, which operates in 180 countries. Aditya Infotech became the exclusive distributor of Dahua’s products in India in 2023. A substantial portion of the company’s revenue comes from the sale of Dahua-supplied products, amounting to INR 790.63 crore.
In 2017, Aditya Infotech further expanded its manufacturing capabilities by entering a joint venture with Dixon Technologies (India) Limited, a prominent electronic manufacturing services provider. This collaboration led to the establishment of a dedicated manufacturing facility, utilizing Dixon’s expertise to streamline production processes. The company’s manufacturing operations are primarily supported by synergies with AIL Dixon Technologies India Private Limited and Dixon Technologies (India) Limited. As of 31 March 2024, Aditya Infotech operates a manufacturing plant in Kadapa, Andhra Pradesh, with an installed capacity of 15.59 million units annually. The company also boasts a dedicated R&D center in Noida, Uttar Pradesh, driving innovation and product development.
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#1 CP Plus IPO: Global & Indian Video Surveillance and Security Market
The video surveillance market is rapidly expanding globally, driven by increasing demand for safety and security. Over the past two decades, the industry has advanced significantly. Frost & Sullivan estimates the global market to reach USD 32.9 billion in FY 2024, with projected revenue growth at a CAGR of 13.3% from FY 2024 to FY 2029, compared to just 2.8% from FY 2020 to FY 2024. The volume of video surveillance units is expected to rise from 1.01 billion in FY 2024 to 1.96 billion by FY 2029.
In India, the video surveillance market grew from nearly USD 1 billion in FY 2020 to USD 1.2 billion in FY 2024, recording a CAGR of 4.3%. As one of the fastest-growing economies, India has prioritized infrastructure with government initiatives such as Smart Cities, Digital India, PM Gati Shakti, and the Bharatmala Scheme. Security is a key component of these efforts, making video surveillance crucial. In addition to security, businesses and enterprises use CCTV systems for purposes like people counting, energy management, and automatic number plate recognition.
#2 Aditya Infotech IPO: Technology Leadership in Surveillance Solutions
CP Plus product portfolio deploys a wide variety of security technologies such as artificial intelligence (AI) and machine learning (ML) to deliver cutting-edge AI analytics, integrated Internet of Things (IoT) ecosystem for connected and smart homes as well as several cloud services, this includes health monitoring systems (HMS) and attendance management systems (AMS).
CP Plus product lines consists of high definition (HD) analog cameras, digital video recorders (DVR), internet protocol (IP) network cameras, network video recorders (NVR), biometric products, access control products, mobile surveillance solutions, body-worn cameras, thermal cameras, temperature screening solutions, interactive displays, routers, cables, power supplies (SMPS), racks and other accessories and products. The company is also working towards Indian-made SoCs and thermal cameras. At the end of Fiscal 2024, it offered 2,937 stock-keeping units (SKUs).
#3 CP Plus IPO Review: Valuation
| FY 2022 | FY 2023 | FY 2024 | |
| EPS | 9.06 | 10.57 | 11.24 |
| RONW (%) | 33.78 | 34.76 | 27.15 |
| NAV | 26.82 | 30.40 | 41.39 |
| ROCE (%) | 31.40 | 23.07 | 23.57 |
| EBITDA (%) | 9.47 | 7.89 | 8.46 |
| Debt/Equity | 0.66 | 1.31 | 0.96 |
The company has shown consistent financial growth in recent years, with revenue from operations, EBITDA, and profit after tax has grown at a CAGR of 30.01%, 22.62%, and 9.00%, respectively, from Fiscal 2022 to Fiscal 2024. Aditya Infotech’s revenue from operations, restated profit for the year, and EBITDA grew at a CAGR of 30.01%, 22.62%, and 9.00%, respectively between Fiscal 2022 and Fiscal 2024.
#4 CP Plus IPO: Consistent Financial Performance
| FY 2022 | FY 2023 | FY 2024 | |
| Revenue | 1,646.21 | 2,284.55 | 2,782.43 |
| Expenses | 1,541.28 | 2,156.07 | 2,606.11 |
| Net income | 96.93 | 108.31 | 115.17 |
From a financial standpoint, CP Plus has demonstrated steady growth over the past few years. In FY 2024, the company reported a revenue of INR 2,782.43 crore, a notable increase from INR 2,284.55 crore in the previous year. Its EBITDA margins have also seen improvement, standing at 8.46% for the most recent fiscal year, up from 7.89% a year ago. This improvement can be attributed to operational efficiencies and increased demand for premium surveillance products.
CP Plus’s profitability has also been on an upward trajectory, with net profits rising from INR 96.93 crore in FY 2022 to INR 115.17 crore in FY 2024. The company’s solid balance sheet and stable cash flows provide a favorable backdrop for its future growth plans.
These financial figures underline the company’s consistent performance and provide a solid foundation for its IPO valuation.
#5 CP Plus IPO Details: Objects of Fundraising
The IPO consists of both fresh issues and an Offer for Sale (OFS) by existing shareholders. CP Plus plans to raise INR 500 crore through the fresh issue which will be used towards debt repayment. The repayment will improve the debt profile of the company.
In addition, existing promoters aim to divest shares worth INR 800 crore through the OFS. The price band and minimum lot size have not been disclosed yet. The total issue size is estimated to be worth INR 1,300 crore.
#6 CP Plus IPO: Strong Market Position and Brand Recognition
CP Plus is a well-recognized brand in India as a go-to brand for surveillance solutions, particularly in sectors like retail, government, banking, insurance, real estate, healthcare, industrial, defense, and education. In Fiscal 2024, as of 31 March 2024, the company sold products in over 500 cities and operated through a network of 40 branch offices and nine RMA centers across India. The company’s strong distribution network includes 800 distributors in tier I, tier II, and tier III cities of India. The company has 550+ distributors, 1,800+ system integrators, and 30,000 T2 partners (globally).
As of 31 March 2024, CP PLUS has 48 Galaxy Stores across India. Aditya Infotech has a diversified customer base across sectors including Absolute Electrovision, Bright Computers, Gaursons India, Intra-Tech Computers, IR Focus CCTV, Kiran Electro Systems, Lightforce BuildINT, Total Security Solution, and Vasp Infotech. Further, the company’s customer base also comprises Delhi Government Schools, Madhya Pradesh Police Station, and Delhi Police Station. As of 31 March 2024, the company had a manufacturing capacity of 1.56 crore units of cameras and DVRs/POEs.
#7 Aditya Infotech IPO: Technological Edge: AI and Analytics Integration
One of the key differentiators for CP Plus is its emphasis on technological innovation. The company has been integrating advanced AI capabilities into its surveillance solutions, including facial recognition, motion detection, and predictive analytics. This enables customers to not only monitor but also proactively address security threats.
CP Plus has also been expanding its offerings in cloud-based solutions and Internet of Things (IoT) applications. By positioning itself at the forefront of these technologies, CP Plus aims to capitalize on the increasing demand for smart, data-driven surveillance systems.
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#8 CP Plus IPO: Risk Factors: Market Competition, Technological Changes, and Global Factors
Despite its strong market position, CP Plus faces several risks that investors should be aware of. The global security and surveillance market is highly competitive, with major international players like Hikvision dominating significant market share. CP Plus will need to continuously innovate and maintain price competitiveness to sustain its growth trajectory. Aditya Infotech’s operations and performance are directly related to and affected by the cost of various components used in manufacturing. The cost of components is dependent on the global supply chain, import duties, currency exchange rates, natural disasters, changing economic conditions, or other geographic and political events.
The company depends on a limited number of suppliers for parts, materials, and products. Any interruption in the availability of parts, materials, and products could adversely affect the business, results of operations, cash flows, and financial condition. A significant portion of revenue from operations is generated from the sale of products supplied by Dahua which contributes to 28.41% of revenue from operations in Fiscal 2024. Any disruption in the supply of products for sale by Dahua at commercially viable terms, or demand thereof, may adversely affect its business. AIL relies primarily on synergies with AIL Dixon Technologies India Private Limited and Dixon Technologies (India) Limited, for the manufacturing of products. Any disruption in relations may adversely affect its business.
Additionally, the rapid pace of technological advancement in the industry presents both an opportunity and a risk. CP Plus must invest in R&D to stay relevant, but there is always the risk that newer technologies could disrupt the market, potentially affecting its product offerings.
#9 CP Plus IPO: Promoter Holdings and Shareholding Pattern
As of the pre-IPO phase, CP Plus’s promoters hold 74.46% of the company’s equity. The company’s strong promoter backing provides stability, but it is crucial to monitor any changes in promoter sentiment or further dilution in their stake.
#10 CP Plus IPO: Long-Term Prospects: Riding the Digital Wave
Looking ahead, CP Plus is well-positioned to benefit from the growing demand for security solutions, both in India and globally. The global surveillance market is expected to grow at a compound annual growth rate CAGR of 13.3% over the next five years, driven by increasing urbanization, smart city initiatives, and growing concerns over public safety.
Furthermore, CP Plus’s investments in AI, cloud technology, and IoT will likely drive its long-term growth. With a strong brand, an expanding product portfolio, and a solid financial foundation, CP Plus has the potential to be a key player in the future of security technology.
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Conclusion
The CP Plus IPO offers investors an opportunity to gain exposure to the fast-growing security and surveillance industry. While the company’s strong market position, technological edge, and financial performance are positive indicators, investors must also consider the risks posed by competition rapid technological change, and global price change of the components. Given the company’s growth potential and its ambitious expansion plans, CP Plus could be a worthwhile addition to an investor’s portfolio, particularly for those with a long-term perspective.
From a technical perspective, the positive aspect of the company is steady growth in EPS and NAV, which is a good indicator of increasing profitability and asset value for shareholders. Debt/Equity returned to a more reasonable level in FY 2024 after a spike in FY 2023, whereas RONW and ROCE have shown declining trends, suggesting a reduction in return efficiency for both equity holders and capital employed. EBITDA margins are slightly declining, indicating potential margin pressure or cost inefficiencies are a negative aspect of the company.
