Skyways Air Services

IPO Size: Rs.583 cr

• Fresh Issue of Rs. 399 cr (20% dilution) to (i) repay Rs. 217 cr of Rs. 505 cr gross debt as of 30.6.26 (ii) Rs. 130 cr for working capital
• Offer for Sale (OFS) of Rs. 184 cr, 72% OFS by promoter (79% to shrink to 57%) and balance 2 directors (to halve 7% combined holding post IPO)

Price band: Rs. 131-138 per share

M cap: Rs. 2,006 cr (IPO is 29% of m cap)

IPO Date: Mon 24^th Aug to Thu 27^th Aug 2026, Listing Mon 31^st Aug 2026

• Company had filed an RHP on 2nd Mar 2026 but did not proceed with IPO on outbreak of Middle East war.

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Air Freight Forwarding Company

Skyways Air Services is a 42 year old Delhi-based air freight forwarder, handling the maximum number of air cargo consignments from India. 75% of Rs.2,800 cr revenue comes from air freight services and 15% from ocean freight services. Exports of textiles, pharmaceuticals, machines, electronics, auto and spare parts drive majority revenue for company.  

 

Very Slim Margin

Despite being India’s largest air freight forwarder, business lacks pricing power with EBITDA margin of 4% and net margin of 2%. Moreover, other income accounts for an average 30% of bottomline, implying a slimmer net margin of sub 1.5%. Thus, business growth is linked to rise in volumes and realization on volume handled.

In the past 4 years, volume of cargo handled by Skyways Air has risen by 21% but realizations are under pressure, down 8-11%. Thus, 4 year revenue CAGR stood at 14%, rising from Rs. 1,659 cr in FY22 to Rs. 2,813 cr in FY26, with EBITDA rising at 16% CAGR. FY26 PAT was Rs. 64 cr, with EPS of Rs. 3.6.

 

High Working Capital Requirement

Gross debt of Rs.  505 cr, as of 30.6.26, is quite high in relation to net worth of Rs.332 cr. Even after investing Rs. 130 cr from fresh issue proceeds towards working capital, and excluding internal accruals, company estimates a working capital gap of Rs. 320 cr, to be funded via debt. Thus, after a year, net debt to equity will moderate to only 0.6:1.

Company’s debt is rated A (Stable outlook) by Crisil and Care, but will face pre-payment penalty of upto 2%, for repayment from fresh issue proceeds.

 

Other Risks and Concerns 

• Asia accounts for 85% of company’s revenue. Due to Middle East war, Q1FY27E volume is likely to be soft, due to hubs of Saudi Arabia and UAE being impacted.
• As of 31.3.26, receivables exceeding Rs. 30 cr are outstanding for over 6 months, but have not been provided for.
• Company’s subsidiaries face litigation with a UK-based customer for business worth Rs. 60 cr, which the complainant has allegedly suffered Rs. 44 cr loss. This is a material amount for company’s profitability.  

 

Expensive Pricing

M cap of Rs.2,006 cr implies a PE multiple of 25x, on historic basis. Company’s 51% subsidiary Brace Port Logistics, listed on NSE’s SME segment, is trading at a PE multiple of 18x, for 10% operating margin. Since Skyway’s margins are wafer-slim, this PE multiple is quite stretched. Moreover, RoE of 22% will reduce to low double-digits going forward.

Many logistics IPOs like that of Mahindra Logistics and TVS Supply Chain have not rewarded investors, which will weigh on Skyways.