Skyways Air Services IPO: Qatar Airways Deal Nears Sign-Off, Company Plans Debt Cuts
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Skyways Air Services is nearing a formal Qatar Airways agreement while using IPO proceeds to reduce debt and boost working capital, as the company reports sharply improved operating cash flow and a shorter working-capital cycle.
Skyways Air Services' initial public offering (IPO) opened for subscription on Monday, August 24, even as the air freight forwarder moves closer to signing a contract with Qatar Airways. Chairman and Managing Director Yashpal Sharma said the terms of the agreement have been finalised and the formal sign-off is expected in the next few weeks, as reported by CNBC-TV18.
The Skyways Air Services IPO was subscribed 52% on August 24, according to NSE data, with the retail portion subscribed 1.09 times, the non-institutional investor portion 0.66 times and the qualified institutional buyer portion 0.52 times.
The IPO opened on August 24 and will remain open for subscription until August 27.
Skyways typically enters into 12-month capacity contracts with airlines, giving it access to cargo capacity across European, Middle Eastern, Indian and Far Eastern routes. The Qatar Airways agreement will add to this network once the formal signing is completed.
The company is also using the IPO to reduce its debt. Around Rs 216 crore of the proceeds will be used to repay long-term borrowings, which Sharma expects will lower interest costs by around Rs 16-18 crore this year. Another Rs 130 crore has been earmarked for working capital to support future growth.
Skyways currently has gross debt of around Rs 600 crore, while net debt stands at about Rs 198 crore.
The company's cash generation has improved significantly. Operating cash flow rose to Rs 113 crore in FY26 from a negative Rs 9 crore in FY24, helped by higher volumes, improved profitability, incentives from carrier partners and better working capital management.
The gross working capital cycle has also come down to 75 days from 90 days, while the net cycle stands at around 43 days. Sharma said the improvement can be sustained, supported by the credit period offered by carrier partners.
Skyways has also invested in technology over the past seven to eight years and has API integrations with major airline, shipping line and logistics partners. Sharma expects these investments to help the company handle higher business volumes without a similar increase in employee numbers.
“We feel that, in times ahead, the increase in workforce would not be as much in the increase of our business,” Sharma said.
Skyways currently has a 5.64% share of India's air-export cargo market. Sharma said the company's scale and access to carrier capacity help it acquire customers, improve profitability and build stronger customer relationships.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
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