India deal
While looking to rebuild and solidify confidence in RVSN after today’s plummet, I took a further look at the India deal w Sujan. There is not a lot of info available at this time but wanted to point a few things out in hopes for others feedback.
The MOU is a step in the right direction but ultimately guarantees very little. And also introduces a ton of risk. Let me try to express my thought process on this one.
First the risk: Since this agreement is not ultimately binding (yes I know it says they’ve entered a binding MOU etc etc) it’s really just a binding agreement to trial the rail vision tech. IF all goes well the test/trial AND if RVSN and sujan can agree on manufacturing and distribution terms, this could be big. However if this trial stage does not go as planned this could potentially block RVSN out from every truly breaking into the largest railway market in the world. God forbid sujan, who apparently is well respected in the Indian market, says we tried rail vision and it was not what we were expecting and aren’t happy and don’t want to move forward it’s going to be very difficult for RVSN to ever break into that market. Which would be very detrimental to future growth potential.
Second risk would be this HUSE organization that Brijesh (ceo of sujan) is involved with. They are looking to negotiate the ability to manufacture this tech eventually in India. Hence the statement of “we are proud to support Rail Vision’s solutions to become fully compliant with ‘Make in India’ initiatives, which will empower Indian Railways to deploy advanced, locally-sourced safety systems without compromising on global standards”. While they clearly have a lot of skin the game if they move forward with RVSN, this will also be detrimental to the potential revenue to RVSN directly. They’re basically going to license the tech to sujan and get paid a royalty. That’ll likely decimate potential earnings associated with the India market. Granted if we can get 10-20% of the 15k trains etc it’s still a substantial amount of money but it’s not like sujan isnt going to try to make this for cheap in India and reap the financial benefits.
The pros: Sujan did apparently issue an upfront payment (revenue woohoooo) to rail vision with the promise to pay more should certain milestones be reached. Hopefully we’re on track to meet and exceed those miles stones.
Also brijesh did post on his linked page the article stating the new partnership etc
I think the India deal could be huge but I think we’re a long way away from recognizing the potential and seeing any positive movement in the SP until more PR comes out. I think they need to update the market with how their trial is going and that they’re hitting milestones and raking that money in for doing so.
I think the potential of this opening the door to the India market outweighs the risk of the sujan evaluation not going well. Also the made in India initiative will have a big impact on potential revenue coming out of India.
22k @ 1.57