Along with the electric vehicle (EV) revolution, the drone revolution is happening side by side

The futuristic drone industry in India holds immense promise now that the government has come out with new rules. Drones are officially known as Unmanned Aircraft Systems (UAS) and are beneficial for different sectors depending on their needs.

These sectors include transportation, agriculture, law enforcement, surveillance, and most important of all – defence.

Take for example Zomato and Swiggy. Both these online food aggregators are discussing food delivery via drones. Companies involved in the drone industry in India have sighed a huge relief after the government announced new drone rules last month on 26 August.

The liberalised policy depends on self-regulation and non-intrusive monitoring rather than enforced regulation. The new rules replaced the Unmanned Aircraft System Rules 2021 the Ministry of Civil Aviation had notified five months ago.

So What Are These New Rules?

Well, the new drone rules aim to ease the process of using drones in India for various purposes, including non-commercial use. Under the new rules, you will not need any security clearance to operate and fly tiny drones. In addition, the government is carving out drone corridors to facilitate delivery of cargo deliveries.

There would be no government intrusion for drone use in India. With this, the government is hoping to trigger growth of drone usage in multiple industries. Earlier, the Indian government had mandated a series of approvals including unique authorisation number, a unique prototype identification number, etc.

Now with these new rules, none of the approvals are required.

The centre has also increased the payload of drones from 300 kilograms to 500 kilograms. Apart from the above, there were many more rules notified by the government.

So, Which Companies Will Benefit From The New Rules?

Here are few Indian companies which are chasing the exploding drone market:

1 Info Edge (India)

Info Edge (India) has made investments in Bengaluru-based Skylark Drones. In July 2021, Skylark Drones raised US$3 m (about ₹220 m) in its pre-Series A funding round co-led by Info Edge Ventures and Indian Angel Network (IAN) fund.

Swiggy has partnered with Skylark to test out its drone delivery system.

Founded in 2014, Skylark Drones provides work-site intelligence to enable accurate business decision-making using drone data. The company has offices in the US and India, and it claims to be helping 100 enterprise clients, who have processed over 1 m images and 20,000 autonomous flights via its platform.

2 DCM Shriram Industries

Last month, DCM Shriram Industries announced an arrangement with Zyrone Dynamics, a Turkish UAV and drone manufacturer. Under this arrangement, 30% of the firm's shares were bought by DCM Shriram Industries for US$1 m, giving it a total valuation of US$3.5 m.

DCM was looking to invest in Zyrone for a long time but due to the pandemic conditions, the negotiation period stretched to 18 months. Under the partnership, Zyrone will be providing DCM Shriram Industries with technological support and both parties will support each other in marketing the products in India and around the globe.

Zyrone Dynamics specialises in manufacturing small rotary-wing drones. Zyrone Dynamics has been promoting small drones that it calls 'variable volume' UAVs.

3 Zen Technologies

Zen Technologies is a leading provider defence training solutions, headquartered in Hyderabad with offices in India and USA. The company designs, develops and manufactures state-of-the-art combat training solutions for the training of defence and security forces worldwide.

The company manufactures land based military training simulators, driving simulators, live range equipment, and anti-drone systems.

Heavy lift logistics drones (HLLDs) from Zen Technologies offer advanced capabilities to fulfil the role of providing reliable logistics support in challenging environments and even in combat situations.

Its share price has spiked significantly after the government notified new rules.

Today, the stock is locked in 20% upper circuit after the company informed exchanges that its order book has witnessed a significant surge to ₹4 bn as on 1 September 2021, as against an order book of ₹1.9 bn on 30 June 2021.

The company is almost debt free.

In its latest annual report, the company said India is targeting to export military equipment worth US$5 bn in the next five years. With this, Zen Tech’s exports will accelerate. The company is also focusing on large export opportunities within the Middle East, CIS, and Africa. It’s dedicating a core team to pursue business opportunities in the USA and other friendly countries.

4 RattanIndia Enterprises

Just three weeks back, RattanIndia Enterprises made a strategic investment in US-based, Matternet, the world’s most extensive urban drone logistics platform.

It also announced the formation of an Indian subsidiary to kickstart the drone business in India.

After the announcement of new rules, the company in an update said it welcomed the liberalised rules. The new rules are set to transform core sectors of the economy including logistics, agriculture, mining, infrastructure, surveillance, emergency response, transportation, geo-spatial mapping, defence, and law enforcement and will make India a global hub for drones by 2030. RattanIndia Enterprises is the flagship company of RattanIndia group for its new age growth businesses.

Apart from drones, the company has also forayed into electric mobility space through Revolt Motors to democratise clean commute using next-gen mobility solutions.

Start-Ups Involved In Drone Technology

India is focusing more on being self-reliant. Defence Minister Rajnath Singh, while addressing the audience at an industry event, revealed that the government is aiming to bring down defence imports by at least US$2 bn by next year. India has more than 190 defence tech start-ups building innovative tech solutions to empower and support the country’s defence efforts.

Here are a few of them involved in drone technology:

EyeROV – Founded in 2016 by Johns T Mathai, and Kannappa Palaniappan P, EyeROV is currently developing India’s first commercial underwater drone for remote inspection of offshore assets. Recently, Indian Oil Corp (IOC) announced that its deploying drones to monitor its vast network of pipelines across the country as it doubles down on the use of technology to thwart attempts to steal fuel.

Vinveli – Iowa and Chennai-based Vinveli is building indigenous drones for special forces under the Ministry of Home Affairs.

ideaForge – This drone start-up claims to have over 90% of the market share in the security and surveillance segment. The company is involved in manufacturing drones for defence, homeland security, and industrial applications.

A Multi-Billion Dollar Industry

The drone industry in India is expected to gain momentum. India is estimated to develop a multibillion-dollar drone industry in this decade. According to global market intelligence and advisory firm, the global drone market, which is currently dominated by US, China, and Israel, will touch US$28.47 bn this year and India will comprise about 4.25% of that.

The foundation of growth has been led by the new Drone Rules 2021. With rising number of drone training institutes, India will not be far behind.

Along with the electric vehicle (EV) revolution, the drone revolution is happening side by side. Co-head of Research at Equitymaster, Tanushree Banerjee keeps a close watch on stocks from this space.

In fact, as per Tanushree, India's drone revolution is a 4x profit opportunity. She has identified a little known drone company with immense potential.