- Our view
- Subscribe
- Market cap then
- ~INR 389.33 Cr.
- Price band
- INR 210 to 225 per share
FlySBS Aviation Limited provides private air-chartering services from Chennai across domestic and international routes. Minerva Capital Research Solutions recommends Subscribe to its IPO, citing fleet expansion under dry leases and expected growth in private jet demand; the issue is valued at 13.7x FY25 PAT.
About FlySBS Aviation
Incorporated in 2020, FlySBS Aviation is a DGCA-approved Non-Scheduled Airline Operator providing private air-chartering services. Its operating base is in Chennai, with domestic and international routes. The company had 3 aircrafts, comprising 2 under wet lease and 1 under dry lease. In FY25, it recorded 2,600 flying hours, including 1,812 international hours and 788 domestic hours, serving corporates, ultra high-net worth individuals and high net worth individuals.
FlySBS Aviation IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 210 to 225 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 389.33 |
| Exchange | NSE-SME |
| Minimum Lot Size (Retail | HNI) | 1200 | 1800 |
| Issue Opens on | 01-Aug’25 |
| Issue Closes on | 05-Aug’25 |
| Listing Date | 08-Aug’25 |
| Fresh Issue of Shares (#) | 45,57,000 |
| Offer for Sale (#) | 0 |
| Funds Mobilized – Fresh Issue (INR Cr.) | 102.53 |
The issue has no Offer for Sale. The report lists the IPO reservation as <=50% for QIB shares, >=35% for retail shares and >=15% for NII (HNI) shares.
Use of IPO Proceeds
- Aircraft acquisition: INR 80.47 Cr. is allocated to capex for acquiring 6 pre-owned aircraft for long-term dry lease.
- Repayment of borrowings: INR 7.28 Cr. is allocated for repayment of borrowings.
- General Corporate Purpose: The amount is shown as [●] in the report.
Strengths
- Fleet expansion: The company has signed a Letter of Intent and offer to lease with separate international lessors for 2 additional aircraft on dry lease, subject to technical and regulatory processes. IPO proceeds are intended to fund 6 more pre-owned aircraft on long-term dry leases.
- Dry-lease revenue opportunity: Dry-lease revenue rose from 10 in FY24 to 45 in FY25. The report notes management’s view that each aircraft under dry lease has potential to generate INR 50 to INR 60 Cr. of revenue per year.
- Industry demand: The report expects the private jet industry to grow at CAGR of 13%-15% over the next 5 years, driven by demand from high net worth individuals, an expanding startup ecosystem and demand for fast, flexible business travel.
- Experienced leadership and group synergies: The company is led by Capt. Deepak Parasuraman, described as having extensive aviation experience. The report notes that synergies with the group company may support negotiations for MRO services, fuel purchase, ground handling and leasing agreements.
- Repeat business: Repeat customers represented 89.3% of FY25 revenue, which the report says mitigates customer concentration risk to some extent.
FlySBS Aviation Key Financials
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 34 | 106 | 194 |
| Growth Rate Y-o-Y % | 212% | 82% | |
| EBITDA | 5 | 15 | 40 |
| EBITDA % | 13.6% | 13.9% | 20.6% |
| PAT | 3 | 11 | 28 |
| PAT % | 9.9% | 10.5% | 14.5% |
| Debt (Short+Long) | 3 | 3 | 18 |
| Debt/Equity | 0.29x | 0.04x | 0.12x |
| ROE % | 45.0% | 38.4% | 32.3% |
| ROCE % | 45.0% | 45.6% | 41.8% |
| CFO / EBITDA % | 75% | 8% | 0% |
Revenue, EBITDA and PAT increased across FY23 to FY25. Debt (Short+Long) was 18 in FY25, while CFO / EBITDA was 0%.
Business and Growth Plan
FlySBS currently provides private air-chartering services from Chennai using 3 aircrafts. Under a dry lease, the company takes the aircraft and assumes operating responsibilities such as crew, maintenance, insurance and licences. Under a wet lease, the lessor provides the aircraft and related operating services, while FlySBS focuses on marketing and commercial operations.
- Planned additions: Two additional aircraft under dry lease are subject to completion of technical and regulatory processes. The IPO-funded acquisition plan covers 6 pre-owned aircraft.
- Current revenue split: FY25 revenue included 45 from dry lease and 149 from wet lease, against total revenue of 194.
Industry Outlook
The report states that India’s private jet industry grew at CAGR 8% from FY19 to FY24, reaching $274 Mn., and expects CAGR of 13%-15% over the next 5 years. It also notes that India’s UHNW population is expected to grow at CAGR of 7%-9% from 2023 to 2028P.
For a Chennai – London – Chennai round trip, the report’s comparison puts total cost per passenger at INR 11,02,846 for a 13-seater private jet and INR 11,03,669 for a first-class commercial airline flight. It lists the private jet as direct, with a 10-12 hours duration, compared with one stop and 15-17 hours for the commercial flight.
Shareholding
| Particulars | Pre-Issue | Post-Issue |
|---|---|---|
| Promoter & Promoter Group | 44.08% | 32.47% |
| Public & Others | 55.92% | 67.53% |
| Total | 100.00% | 100.00% |
IPO Valuation and Our View
The issue is valued at a P/E ratio of 13.7x based on FY25 PAT. Minerva Capital Research Solutions recommends Subscribe, citing experienced leadership, expected industry growth, group-company synergies and planned fleet expansion under the dry-lease model.
- INR 210 to 225 per share
- IPO price band
- 13.7x
- P/E based on FY25 PAT
- Subscribe
- Recommendation
Key Risks
- Regulatory risk: Adverse observations from DGCA and an inability to resolve issues promptly are identified as risks. The report also notes that the company received 4 Level II Deficiency Reporting Forms after an operations audit and submitted a corrective-action report within the DGCA’s stated timeframe.
- Customer concentration: Customer 1 and Customer 2 contributed 40.6% and 36.4% of FY25 revenue respectively; the top 3 customers together represented 84.1%. A downturn could reduce air travel demand.
- Aircraft costs: As the fleet ages, maintenance and fuel costs per aircraft may increase. If the higher costs are not passed on to customers, margins may be compressed.
- Fleet additions and commercialization: Completion of regulatory and operational processes for bringing new aircraft into service is a key monitorable.
Listed Peers
As per the RHP, the company has no listed peers.
Our View
The recommendation rests on the company’s dry-lease expansion plan and the report’s expectation of growth in private air-chartering demand. The key risks are customer concentration, regulatory processes and the possibility of higher fleet costs. Minerva Capital Research Solutions recommends Subscribe to the issue.
Standard disclosures
- Research Analyst has served as an officer, director or employee of subject company(ies): No
- We or our associates have received compensation from the subject company(ies) in the past 12 months: No
- We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
- We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
- We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
- We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
- Nature of financial interest in subject company, if any –Nil
- We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
- Subject company (ies) may have been client during twelve months preceding the date of distribution of the research report-No.
- We or our Associates or Research Analyst are engaged in market making of subject company – No
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Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.
The research report serves as general information and does not account for individual investment goals, financial situations, or needs. Minerva Capital Research Solutions strives to provide reliable and comprehensive information, sourced from what are believed to be trustworthy channels. However, this information has not been independently verified by Minerva Capital Research Solutions or its analysts, and no guarantees are made regarding its accuracy or completeness. The opinions expressed in this report reflect the views of the research analyst at the time of publication and may change over time. Minerva Capital Research Solutions and its affiliates as on date of publication of this report may or may not hold any positions in the securities discussed. The views presented are general and do not consider individual risk tolerance or investment objectives; therefore, readers should seek independent professional advice before making investment decisions. Minerva Capital Research Solutions does not guarantee a favorable outlook for any specific industry or sector and urges investors to consider all relevant risk factors, including their financial circumstances, before investing. The analyst certifies that their views accurately represent their personal opinions on the companies discussed and that no part of their compensation is tied to specific recommendations made in this report. This material should not be interpreted as an offer or solicitation to buy or sell securities in jurisdictions where such offers would be illegal. Consequently, brokerage and investment services described herein are not available to Canadian or U.S. persons. Distribution outside India requires prior written consent. This Research Report assumes that the recipient will assume all risks associated with its contents. If there are any disagreements or dissatisfaction with this report or its disclaimer, the only recourse is to cease using it. Minerva Capital Research Solutions and its affiliates will not be liable for any direct or indirect losses resulting from the use of this report. Recipients are required to adhere to these restrictions. The material is for the personal use of authorized individuals and does not constitute a solicitation or offer to buy or sell any securities in jurisdictions where such actions would be illegal.
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Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%