Afcom Holdings IPO: Things an Investor Should Know

Afcom Holdings IPO is offering a 100% book-built public issue. This upcoming IPO is offering a fresh issue of up to 68.40 lakhs of equity shares. The face value is reported as Rs. 10 for each share. This new IPO issue is being made through the book-building process with a reservation of not more than 50% of the new offer is reserved for Qualified Institutional Investors, not less than 15% reserved for Non-Institutional Investors and the remaining 35% or more reserved for Retail Individuals. Application for public issue and subscription opening and closing dates and other important dates will be announced soon.

About the Company

The company was originally incorporated as a private limited company in the name of Afcom Holdings Private Limited (“Company”) in the year 2013. The company have been operating Cargo Flights to the ASEAN countries, particularly to Singapore. The company is led by a management team that has extensive industry experience and is engaged in carriage of cargo on airport-to-airport basis. The company have entered into agreements with the GSSAs, pursuant to which the GSSAs must provide a minimum of 50% of the volume of cargo to them. However the company will pay the GSSAs commission and incentive based on the cargo they provide to them. Apart from GSSA, they also have business relations with freight forwarders and cargo sales agents (“CSA”), who blocks space on their aircraft and hand over the cargo to them. Further the company have entered into an agreement dated 24th September, 2021 with the Air Logistics group (a part of World Freight Company), which is a global leader in the cargo sales and service business. The Air Logistics group represents the Company as its GSSA in far-eastern countries.

They have also entered into an agreement dated 13th October, 2022 with Taylor Logistics Private Limited, which is a part of the TTK Group as our GSSA in India.

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Objectives of the Public Offering

It is reported that the Company plans to utilize the net proceeds which are being raised towards funding will be in the various purposes includes funding Capital Expenditure towards taking of two new aircraft on Lease basis, pre-payment or re-payment of all or a portion of certain outstanding borrowings availed by our company, funding of working capital requirement and to meet some other general corporate purposes.

Financials of the Company

The company reported net revenue of Rs 134.16 Crore, assets worth Rs 129.30 Crore, and profit after tax, which is reported as Rs 23.10 Crore as of 29 Feb 2024. If we look at the company's sales statistics, industrial growth accelerated to 7.1 per cent per annum from FY15 to FY19, compared to 5.5 per cent in the preceding five-year block of FY10 to FY14. The unexpected arrival of the COVID-19 pandemic in March 2020, its contagion and attendant damages during FY21 caused a short-lived industrial contraction. However, on the strength of the multi-pronged reforms in recent years, the Indian Industry is likely to record a robust 8 per cent growth per annum during the triennium ending March 2024, as indicated by the first advance estimates of National Accounts for FY24.

Key Performance Indices of Afcom Holdings

Key performance indicators of the company reported Growth in Revenue from Operations at 58.89%, an ROCE of 34.63%, a Return on Net Worth of 26.53%, and a Profit After Tax Margin of 17.28% as of February 29, 2024.

Lead Manager, Registrar & Promoter of public offering

The IPO is managed by Gyrcapital Advisors Private Limited, which is the book-running lead managers. Link Intime India Private Limited has been appointed as the registrar for the issue. The promoter of the Capt. Deepak Parasuraman, Mr. Kannan Ramakrishnan, Wg. Cdr Jaganmohan Manthena and Mrs. Manjula Annamalai. The IPO listing will be on the Bombay Stock Exchange (BSE).

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