Flysbs NSE SME IPO review

•    The company is engaged in providing private, non-scheduled air charter services in India and select global destinations.
•    With the rising global trades, the segment is poised for bright prospects ahead.
•    Governments plans for expanding airports infra augurs well for this company.
•    The company posted growth in its top and bottom lines indicating the likely trends ahead.
•    Investors can park funds for medium to long term.

ABOUT COMPANY:
Flysbs Aviation Ltd. (FAL) is engaged in the business of providing private, non-scheduled air charter services from India, focusing on delivering seamless air travel solutions to elite clientele. It is DGCA approved Non-Scheduled Airline Operator holding a valid Air Operator Permit. Its customer base includes entrepreneurs, senior corporate executives, politicians, diplomats, celebrities, and other VIPs, all of whom require tailored services to meet their specific travel needs. These demands often encompass flexible flight schedules, access to exclusive destinations, premium luxury amenities, privacy, and stringent security protocols. FAL’s charter services cater to a range of specific travel needs, such as direct travel convenience, multi-destination within tight timeframes, or access to locations lacking commercial flight connectivity. Additionally, its services are frequently sought for critical purposes like medical emergencies, key business meetings, promotional events, and other high-priority engagements.

The Company currently provides private air-chartering services in India with operating base located in Chennai, Tamil Nadu. It offers comprehensive air chartering services, operating dynamically across domestic and international routes. The company has successfully flown clients to diverse destinations worldwide, spanning six continents. This includes routes to the far east in Japan, the Middle East, New Zealand, the Arctic regions of Europe and North America, and as far as Mauritania in Africa. FAL’s operational reach demonstrates its ability to connect clients with a wide array of global destinations, fulfilling their unique travel requirements.

During its initial years of operation, the company carried out private air-chartering services through a wet lease or quasi charter model wherein the lessor of the aircraft provides the aircraft with the complete crew, maintenance and insurance requirements. As the Company matured and gained experience, it has imported and registered an aircraft under dry-lease arrangement on long term basis, whereby the lessor only provides the aircraft. Under the dry lease model, the Company operates a 13-seater Embraer Legacy 600 aircraft.

FAL’s total aircraft flying hours have significantly increased over the last three fiscal years. Its total aircraft flying hours were 2,600 hours, 1486 hours and 522 hours for fiscal 2025, fiscal 2024 and fiscal 2024, respectively. Out of these, the total flying hours from international operations for fiscal years 2025, 2024 and 2024 were 1,812 hours, 1,166 hours and 375 hours, respectively. Most of its clients are mid and large corporates, ultra-high net worth individuals and high net worth individuals. Its revenue from corporate clients for the fiscal 2025, 2024 and 2023 accounted for 94.48%, 94.74% and 86.98%, respectively, of total revenue from operations. Its revenue from ultra-high net worth individuals and high net worth individual for the fiscal 2025, 2024 and 2023 accounted for 5.52%, 5.26% and 13.02%, respectively, of total revenue from operations. Total revenue has 89.26% share from repetitive service users for FY25. As of March 31, 2025, it had 24 employees on its payroll (including 2 retainers).

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 4557000 equity shares of Rs. 10 each to mobilize Rs. 102.53 cr. at the upper cap. It has announced a price band of Rs. 210 – Rs. 225 per share. The issue opens for subscription on August 01, 2025, and will close on August 05, 2025. The minimum number of shares to be applied is for 1200 shares and in multiples of 600 shares, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.34% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 80.47 cr. for capex towards acquisition of six pre-owned aircrafts, Rs. 7.28 cr. for repayment/prepayment of certain borrowings, and the rest for general corporate purposes. 

The IPO is solely lead managed by Vivro Financial Services Pvt. Ltd., and MUFG Intime India Pvt. Ltd., is the registrar to the issue. Giriraj Stock Broking Pvt. Ltd., is a market maker. Vivro Financial Services Pvt. Ltd. is also a syndicate member.

After issuing initial equity shares at par value, the company has issued further equity shares in the price range of Rs. 220.00 – Rs. 468.52, between June 2022, and March 2025.  It has issued bonus equity shares in the ratio of 2 for 1 in November 2024. The average cost of acquisition of shares by the promoters/ selling stakeholders is Rs. 13.18, Rs. 17.89, Rs. 53.30, and Rs. 116.28 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 12.75 cr. will stand enhanced to Rs. 17.30 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 389.33 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 34.68 cr. / Rs. 3.44 cr. (FY23), Rs. 106.72 cr. / Rs. 11.25 cr. (FY24), Rs. 195.38 cr. / Rs. 28.41 cr. (FY25). The company marked growth in its top and bottom lines with surge in net earnings.

For the last three fiscals, the company has reported an average EPS of Rs. 18.48 and an average RoNW of 36.41%. The issue is priced at a P/BV of 2.23 based on its NAV of Rs. 101.08 as of March 31, 2025, and at a P/BV of 1.68 based on its post-IPO NAV of Rs. 133.72 per share (at the upper cap). 

If we attribute FY25 super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 13.70. Based on FY24 earnings, the P/E stands at 34.62. Thus, the issue appears fully priced.

For the reported periods, the company has posted PAT margins of 9.92% (FY23), 10.54% (FY24), 14.54%, (FY25), and RoCE margins of 45.00%, 45.58%, 41.80%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It has adopted a dividend policy in December 2024, based on its financial performance and future prospects.

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with

MERCHANT BANKER’S TRACK RECORD:
This is the 7th mandate from Vivro Financial in the last three fiscals including the ongoing one.  Out of the last six listings, 1 listed at discount and the rest opened with premium ranging from 43.98% to 99.46% on the date of listing.