Highway Infra, Flysbs, Parth & other August 1st Week IPOs : Apply/Avoid? Primary Market Chatter

0:00 Hey everyone, welcome to primary market chatter brought to you by Sunday investing. This is our August first week edition. We'll be talking about a few companies. Surprisingly on main board we just have highway infrastructure who is a equity play. Then there is one which is coming which is knowledge realy and then we have fivememes that we have chosen which we'll be talking about. uh cashier drive, padora industries, path electrical, joti global and uh fly sps. So those are the five companies that we'll be talking about today uh on the theme space. Uh before I get started, just a couple of housekeeping announcements that we usually do when uh

0:46 we are not registered. So none of our opinion is really qualified. Please research. This is just us sharing our read of the company what we have found through whatever research little research that we have done. Uh second if you haven't joined the YouTube channel the link is in the pinned comments YouTube channel join. Uh but I'm assuming now you guys would be able to hear me because I was not saying anything till now but let me know if you guys can not hear me and I will see what is the issue. Can someone just put in if they are able to hear me or not? >> We are able to hear you. >> Perfect. Perfect. Thanks. Uh so u before we get started just want to highlight that knowledge

1:32 because there was some confusion on who is doing it. So we'll not be doing knowledge realy today. We will see uh when we have covered it we'll try and put a review but for today we'll only be doing highway infrastructure and the five theme companies which is again cash drive Badora part Ji global and highway uh and like just said probably starting with the first theme Rohit is still not here Rohit will probably join in sometime and then yes will be away today as well he's enjoying his vacation period which is okay we are covering up for him uh but yeah moving forward Let me just quickly move forward to cash drive marketing. Drive market. So just setting up the company which incorporated in 2009 and specializes in

2:19 outdoor advertising focusing on ve advertising as mobile billboards. So basically cash drive is the biggest vendor for those ads manage. The company provides marketing solutions across transit media digital wall paintings and events aiming for impactful branding through veas media in multiple Indian cities but just setting up the IPO. It's a 61 cr IPO 61 CR A out of which 57.5 crores is a fresh issue which is going into the company and then there's a very small OFS of 3.5 CR uh market cap 230 crores

3:07 so around 28% dilute financials FI2 financials revenue 142 or PA company 18 so they're coming at like let's say around 13p be give or take which seems decent at least like they have left some space at least at a high level we'll try and understand who the PS are how should we value the company financial u the last issue for which was shrif uh so with that maybe I will uh ask Sachin to talk about cash right >> am I audible >> yep >> and the voice is better now the quality audio >> much better much Until last time you always used to feel key

3:54 voice is slightly buffled but this time it's a lot more better. Thank you. >> All right. So uh cash your drive marketing uh was founded in 2009 in Delhi uh by Mr. Rahul Kana who is an IIT Goati graduate. So they primarily uh operate in transit and outdoor advertising. Uh they offer services like media planning, design, fabrication all end to end services they offer. Uh currently they have more the presence in more than 11 states uh primarily in North India, Delhi, Uttar Pradesh, Chandigar etc. some parts of Maharashtra uh as well as Gujarat and Goa as well. And they employ around 90 members in their team. So they operate in two media segments. Uh one is trade media. This is 78% of the revenue. Uh where they source

4:40 uh third party media uh and ads and then they use in the fleets that they have tie-ups with. This is a lower margin business which is around 15 to 20%. Uh the next is exclusion media uh that is 22% of the revenue. Uh they get upfront monthly payments from the fleet operators. Uh get the monthly orders for the advertising, sell the ad spaces and then they retain the differential profit after the operation costs are taken care of. So all of this is part of the long-term contracts they have with the fleet operators like Everest which is a Uberbacked uh uh fleet operator. uh around 10,000 plus taxis they have with them. They also are tied up with electric gain cell for the EV bus thing. So these generate higher margins around 30 to 35%. Uh currently they utilize

5:26 around 45% of ad space in taxis and 65% in the buses area. Uh they do not wish to replicate this with small fleet owners because then they do not have control over the media and ads that are being offered. So 55% of the revenues from the above two segments are for outdoor media which is billboards, bus, shelters, hoardings etc. 37% is transient and sustainable media which is like advertising on moving vehicles etc. So they also work with the government in a revenue sharing model uh for around 1100 EV buses and 98 EV charging stations. So this is just setting up uh it's not yet reflecting revenues but soon will. So they are saying that for this EV charging station uh break even happens at half the tenure of the lease

6:12 term that they get the advertising space. So suppose they take the adversary advertising space for around 10 years. So in two to four years they are able to break even and the rest uh 5 to 10% of the revenue now comes from the print and digital media newspaper ads etc. They recently have won uh one 150 diesel bus order from Rajasthan state transport and 500 diesel bus order from Punjab. So top 10 clients contribute around 60% revenue which has fallen down from 70% earlier. Uh somehow the 73% of revenue in F2 was from repeat customers which was 47% earlier but no new customers have been added yet like they were added in previous year because previous year's customer addition was around 52%. Whereas in the current year

6:59 it's only 26%. So how are they saying that their customer edition is good? I don't know that. So uh they have also participated in campaigns like K mea IPL visit Bharat 2024 campaign etc. Uh coming to financials uh they did 79 CR revenues in FY23 uh 9% AIDA. FY 24 it was 94 CR of revenue with 13% AIA. NE 25 it is 14 142 CR of revenues with 17% AIDA and 13% B. So this was primarily due to exclusive media uh which helped improve the margins and also due to the reduce in printing cost. So uh which is for which they are also utilizing the IPO proceeds uh to set up a in-house printing uh that will further reduce

7:46 this printing cost going further. uh their operating cash flows are quite volatile around 140 days of working capital cycle though and 7 to8 CR of receivables are pending for over two years so that is one thing to note uh trade payables they have largely paid this year so factoring in the cash flows are positive so that is good enough in FY26 they are targeting around 30 to 35% of growth similar margins and expanding beyond uh north and west India uh coming to the risk uh the budget that is allocated to advertising ing is a risk and maybe using platforms like Meta and Google will certainly hurt business of cash drive. Uh they also get a small canvas for the uh ads that they get to show on the buses and taxis. So at times

8:34 that is also under utilized and uh their employation is quite high around 50%. They say that this is due to the labor intensive poster installations but I do not buy it entirely. So that is one thing to note. uh they are also under some 18 to 19 year s of tax litigations which are ongoing for both direct direct tech and indirect tax. So IPO use I told for the inhouse printing facility. Another 5CR is for they are trying to develop a app uh that is technology uh in which they will be able to uh uh uh track the real time campaign of the ads that they are getting from the brands uh using location and picture data that is available. So this will be both for Android uh web web platform and iOS as

9:20 well. Around 12 months is the expected development timeline. So that will come in from FI27 only and the rest 33 CR is for working capital requirements. So they did a private placement round in November to December 24 at 125 per share that was around 166 CR of post money valuation. Uh it included names like RTF, Rajasthan Global uh one private equity India emerging as well. Uh Mr. Virinder Seag was also there. uh this company is already linked with cranes advertising which is already listed in the SM exchange and this IPO includes a small office from one of the promoters. So post IPO they are coming at around 13 times trailing. Uh in peers there is bright outdoor media which trades near 40 times but they own 100% exclusive

10:07 media so they command higher margins. There is signpost as well in the main board uh which trades near 37 times which also owns media but also has better operations across airports and that comes with better margins as well and LM is Nolia so far so good in calendar year 2025 uh all the issues have done positive so that is good ankas were decent art was there again minurba ventures is there uh when nav bharat investment fund is also there uh coming to my view uh I will personally be applying uh but not too much uh from the refunds that I will get get from CP plus so because I was not allotted so I will personally be applying but the business does not have some entry barriers so and is also prone to uh dependence on one of

10:53 events like IPL and com mail etc and the related group entities that are there in the business which are trying to do similar operations like cash drive is slight worry but the values valuations that it is coming in is facing factoring that to some extent that's I have two questions. One has company done the stock price etc. What is it in the same business as this? How is that relevant? because I didn't know that and second uh like how do you see the growth of the segment because the segment in itself is very niche right he was a director and some other

11:41 people were also director that were part and that are part of casual drive so that has done decent in the revenues and profit uh part but not so decent on the price part. So that is one thing to note. Uh for the growth of the sector uh it is good uh because the own exclusive rights for the fleets and this is not some small timeline rights. It is almost 5 to 12 years rights and with the coming of more AV buses and more advertising space it is bound to grow. So sector is niche. >> Good. Got it. But I also feel buses that can definitely like that is one good point right and like the price is

12:27 also same as almost the same as IPO price right IPO was done like preipo was done 6 months ago right so >> right in November and December >> got it so again like I'm also feeling this is one of those issues which can be applied the downside is very limited but then upside also everyone can look for themselves I would probably flip if I although I don't have the money as well. I had put in everything in MMB. So I don't have any refunds yet. So I'll probably skip this. But yeah, I don't see there's any harm in applying to this issue at least at a high level. Uh so with that maybe we have covered cashier drive. We'll probably move forward and talk about the second company. The second company we'll be covering uh is uh Badora Industries. The

13:12 setting of Badora incorporated in 1986. So very old company like 40 years old. company manufactures industrial cables for efficient electricity transmission and distribution serving government discoms and EPC companies across various industrial sectors. The company operates under the brand name Vidut cable. So cable company LT cables PVC cables these are LT cables which are used for transmission. uh just setting up the IPO uh IPO 55 crores K 55 CR IPO all all of which is a fresh issue company market cap 190 crores par in terms of the FI25 financials company revenue 111 cr 10.81 11. So they coming at like 19 trailing

14:01 purchase 19. So at a high level essentially manufactures industrial cables majorly LT which are used in electricity transmission. uh and like they started with PVC cables but then they pivoted to and have moved in the value up in the value chain and now make uh LV cables low voltage cables majorly and through this IPO they want to move up the value chain further and also start manufacturing some of the uh HD cables which are like they are going up from 1 kow range to like 33 kow range uh but sector the sector is going through a huge transmission right now uh huge

14:47 transition right RDS scheme which is essentially revamped distribution sector scheme majorly in UP where they changing all the cables. So uh like how electricification work has happened in the last 5 to 7 years is first scheme was so scheme just basically they electrified all of India and then second scheme which is RDSL where which is more of a reform scheme electricity subject so they are reducing power losses etc increasing efficiency for which your u players like these uh players like uh Bador industries and a lot of their uh peers are essentially helping a company is also Rajesh Power. It is in a like a

15:33 in the same value chain but a different player. So it is a EPC for these electricity transmission companies. These guys are the vendor for like not exactly a vendor for uh Rajes but a vendor for some of the PS of Rajes is how you'll kind of read this company. This is not your standard PVC wire. Polycap polycap is obviously a big brand but this is not that. This is your B2B kind of a play distribution of the electricity. Uh ST cables are basically used for transmission lines which is essentially when electricity is generated uh to the powerhouse. How it comes that is through ST cables and then LT cables are used

16:19 from pole to pole cable that is your LT cables which then comes to your house and then you have in your house all your wiring is essentially PVC cables. So PVC cables is a B2C sort of a model. This is more of a B2B model where you are doing pole to pole pole to house etc. This is where this company is essentially in RDS 3.2 2 lakh crores key wires contract out of which two lakh crores has been done but again the sector in itself is so hot because there is so much work to be done on electricity that the sector is kind of enjoying uh because of that company specific so they have a presence in MP their plant is an MP in Tik T and uh like uh they have a few clients like

17:05 although the names of the clients is not given but from what I could understand they they work with L&D with go with Bajil electricals etc. And this then they also work with a few government discoms and major at uh full capacity per say and EPC contracts around 90% but that keeps changing like that that split is not something which you I think majorly EPC they will continue to revolve across government discoms and uh EPC contracts

17:51 because usually how the sector works is your government discoms that gives you credibility that uh you have done with this and you need like certain to put in certain tenders you need to have worked with government for XY Z uh amount etc. So you become eligible. So I feel the number would slightly gravitate towards government discoms again going forward in FI26 and FI27. The margin would be slightly lower in government because that's a more of a competitive uh business than EPC contracts who are more of a on a rolling basis and once relationship set up so it's a lot more easier to kind of continue doing that. that is operating at full capacity right

18:40 now and close to full around 80% capacity. Uh RSP says 70% but it's operating at close to full capacity because a lot of manual labor is involved. So it's not possible to operate at 100% capacity. Uh so it is probably operating at its full capacity right now. But the good thing is that amount is being raised for capex. So company 23 18 which went up to 81 crores in FI24 and 110 crores in FI25. FI23 was majorly because of a covid impact like the business had reduced but then the new generation came in and we also uh spoke with the promoter once and I think a lot of inter uh some interviews would also be available. uh

19:27 but at least the promoter seemed very credible and genuine and understood his industry very very well which is a big plus uh so FI25 top line in terms of the margin around 15% margin which is industry standards where the industry operates and pat margin is somewhere around 10% so 10% convert in terms of PAT which leads to like 11 CR number basically capex. So they are doing a capex majorly of uh the amount that they will be using the capex uh of the IPO size which is 55 crores 22 crores is going towards establishing a new facility in indor

20:14 near uh indor someplace uh and that would be a huge capacity like that is 35 acres of land. They will use it in phases. Phase one would be a smaller chunk of the promote uh smaller portion of the capex will go live but they will then uh put in more and then they also raising 20 CR for working capital of the company and then rest is for GCP. Uh the only question is this new capex would go live in October of 2026. So October of 2026 is essentially 1 year 2 months away. So and right comparatively when the capex starts pushing in. So it is it seems

21:02 like a FI 27 or FI 28 story. So there's a long gestation period but the sector is hot. So uh like keep that in mind on how you uh want to uh play uh that sector per say but yeah just talking about key company. So what they are doing right now is uh the new phase which will go live uh uh this uh this new seg phase may they will essentially uh do uh like this year they they are expected to do around 120 to 130 cr which is a growth of 15 to 20%. But with new uh plan they will be able to target more electricity boards etc. And they will also include uh in exports their RSP says that they will start getting like targeting exports and they will uh

21:47 target more PCOS etc which would help them and the new capex they are doubling their LT. So basically wires by definition are have slightly more realization because those are difficult margin like LT LT cables you will get somewhere around 10% to HT may you will get around 12% but HT would be a smaller segment because they don't have experience of going into HT and they'll slowly and gradually ramp up uh and they will go up from 1.1 kow of wires which they do right now to 33 kowatt of wires they'll also enter into solar cables etc which would essentially happen by the way one uh one one

22:34 correction I said 35 acres it's 15 acres on which the uh the uh second phase would be but still from 1 acre so they now will not have a issue of just having the land but capex will still like take cost. when that capex goes live that's when uh the uh jump should happen where this new segment in itself this new factory which is your 15 acres of land should be able to add like 300 crores of top line just by seeing the kind of uh growth that they've been doing and capex but uh that is something which as I said is again FY27/ FY28 story in terms of FY26 uh they will probably do 120 crores and

23:20 a top and a bottom line of somewhere around 12 crores is what you can expect it to be. So uh at 12 K forward it's at like close to 16p. Uh P one is DCG cables which is trading at a lower multiple and then the second is dynamic cables. Uh if I talk about DCG cables, DCG cables is at 17p which is exactly similar to this and then dynamic cables is towards 27P. Uh so DCG PVC cables which is your lowest entry barrier and essentially what you use in home dynamic cables mostly 60% of their

24:06 business is from HD cables. So which is a slightly higher margin business and also slightly higher complexity business. So that should essentially get a higher P. This should uh BCG should get a lower P. So this should essentially sit somewhere between the two of them. So at IPO price I feel 17.5p is decent. Had they left slightly more I would have been a lot more happier. But my only problem is there's a long gestation. It's a very good story. The promoter is good. The company is good. it will continue to do well because of the industry's tailwinds. Uh but semi investors would probably move on really fast. So I'm I might be applying to this company. Uh but I would essentially have a short-term view on this where I'll try and max out my

24:53 listing gains if possible and then probably come back at the story sometime end of FI25 because I feel fi 26 when the results would probably be similar is what I'm expecting at that moment of time. it would just make sense to build a position in this company assuming that the valuations are right. So that is what I would do just at a high level in terms of like uh ankors anchor list was pretty decent fin uh was there nen was there n preipo they have done like 5% of preipo back like a year ago and then there was one more preipo which was a month ago which was at 10% discount uh to the current price which uh could have probably been at the same price would have made more sense uh but yeah that is what with respect to padora

25:39 indust indries or vitud cable is I really like the industry. I really like the segment. I like the promoter. It's just that the long gestation period is something which I'm not 100% confident with and it's at coming at 18p. So not a lot to lose. DCG is at 17. This guy is a is a superior to DCG for sure but growth profile and the next guy which is your dynamic cable this guy is slightly inferior in terms of margins etc and the kind of work done. So should settle somewhere in between is what I feel but I expect somewhere around these slightly uh like some listing gains for sure and then we'll see and also the segment has good names like the preip has good names anchor has good name so look at this I would probably be applying for uh

26:24 listing gains and then look come back to the story but again this is a company which I would definitely keep on my track list. Uh with that that is what my review of Padora Industries says. Uh Sachin uh Tan may you guys have any questions? >> Uh yes uh they clarified that uh in uh FI26 and going beyond uh the current revenue split is around 90% government and 10% private. So they are trying to shift it more to private because these government vendors generally have 3 to 5% less margins. So that is one thing there. But but >> didn't they also say that they will continue to do these orders of government because that helps them in order to win bids? >> Yes. Yes, that is there for the reputation making that is there but slightly increasing the private segment

27:11 part to maybe uh get better margins overall. >> Got it. >> And also one thing that they were pri uh they were blacklisted in uh in earlier disc in Uttar Hana or something. So that is over now. So that arbitration is over and no more blacklisting. Uh all claims are over. So perfectly clean. >> Got it. I haven't read it but they are good to know. That's something which I skip. May you have any views on it or Rohit Ro now that you are here. Anything to add on Badura industry. >> I haven't read the company much but like only one good thing I like in like two good things in this company was I like the promoter. Promoter was very very great and second is the segment. uh segment itself is good but you know SM investors are you know very less

27:58 interested towards two or three years so the listing gain should be the only creator to look for at least for next like I would say short to medium term uh but let's say let's see key uh how the things pan out >> got it >> no I think uh reiterating what you said very impressed with the team and promoter long justation So good for someone who has patience. Uh but I think yeah you've covered it well. >> Perfect. With that we'll probably move on to the next issue. Before that just want to uh highlight that the sound issue is done for now. So thank you so much for sticking with us. But yeah that we'll probably move forward to the third

28:44 company and we'll do flybs. Uh now that Rohit is here supposed to cover flybs. uh setting up flybs incorporated in 2020. Company is a Indian aviation company specializing in private jet services. Uh private jets provide the company provides a chartering service on domestic and international routes successfully flying clients to destination across six continents. Uh uh and it's a the promoter entities the promoters are same as FCOM holdings which is a cargo charter service for uh service. This is like more of a private passenger charter services. So a very very niche segment but very interesting in terms of like what cost it is what fee it is coming at what is the growth etc. We'll try and understand setting up

29:29 the IPO it's a 102 crores IPO IPO at a market cap of 389 crores so dilation is around 25%. In terms of FI25 financials, company revenue 195 crores and PAT is around 28.5 crores. So they are coming at like 13p uh give or take. In terms of the LM, the LM is Vibro Financials which has a decent repute. Uh so with that we'll probably move towards uh Rohit to talk about FlyBS. >> Thanks. Thanks Manish. Uh so yes as you said this is a highly awaited IPO and interestingly this was the first pre IPO I think that me and Manish saw uh and at that time we skipped uh for a variety of reasons one of which was just obviously the liquidity of getting money stuck but this was when we were kind of early to

30:17 the uh preipo game and game so we didn't have that much confidence and if we had had a slightly different decision I think on listing this would be 4x for people who are you know uh who did that preipo and there is the whole whole list of names who have actually who actually went ahead and did it. Uh so what what does the company do? So they are a Chennai based private jet operator effectively for the elite Indian. So this will be HNIs, UNIs, corporates uh you know for their senior folks, celebrities, politicians and so on and interestingly what they say is majority of their revenue is actually from this corporate and HNI kind of client not really the celebs and politicians. Uh they operate in an assetike model. asset light means they don't own the aircraft but even that is split into two parts.

31:03 You can either have a dry lease or a wet lease. Uh and this is something I understand thanks to AFCOM. Uh but a wet lease is where you are renting out the entire uh the entire plane which means you are renting out the plane, the crew, the operations like you're getting everything and all you are doing is you are the provider of the or of the demand they have. So when you start out typically you will start out in a wet lease model because that is obviously capital efficient and you're testing out the market and there's less uh risk as you gain confidence which is what they did. Uh they got their first dry lease plane a couple of years ago in FI23. Today they have one dry lease and they operate two wet leases and the idea

31:48 behind this IPO is to go from this configuration and add another six dry lease planes. So a tri lease plane is where you only lease the body, the metal body which is the aircraft and everything else is on you. It's on your books. So the captain, crew, uh operations like everything is sitting with you. Uh and of course the idea behind that is you have much more control. You have the aircraft for 24 hours, 365 days. Uh you if you have the crew available, you can fly it. As far as I understand, there's no real limits on how much you can fly, which means you can absolutely sweat that asset. And it is also great for your overall margins. uh today that that uh uh the dry lease that they have is a 13-seater which is considered a large uh uh private jet. Their wet leases I think are smaller

32:34 planes. I'm not sure about that. Uh but what they want to do going forward is that the the money that they're raising is to go from one large uh dry lease to adding one more large dies, two medium dryies and three small which are basically 13 seater, 8 9 seaters and 7 8 seaters. Uh the I'll get to the numbers. I'll get to why why this matters. Uh before that I'll just cover the market. So this is a super super regulated market. What they told us is that uh it takes 2 to 3 years for getting the permit an NSOP permit which is a non- scheduled operator permit uh which is the permit that is needed for anyone to fly commercial uh charters uh is it it takes a lot of time. You need the right uh capabilities and requirements and

33:20 then it takes a lot of time to just get that permit. Then you've got to find the right uh plane at the right cost. These are typically secondhand planes. They're not you know you don't you cannot really buy a brand new plane and make the economics work. So you need to find the right leaser as well which requires a strong network. So overall this is not a very straightforward market to get into. Uh as per the DGCA record there are only 120 private jets in India which is a very small number and by the promoters estimates majority or many of them are for captive consumption which is basically a single client. Uh so as for the promoters probably 60 to 70 are true commercial charting and this number in the US is 15,000. Obviously US is miles ahead of us but it tells you how underpenetrated we are today. uh the so

34:06 and the other thing is if these guys go from one or say three to 9 you can see that they themselves will become a significant part of the commercial chartering if they're able to fulfill that once they get that supply they're able to fulfill that with demand today for this business about 25% of their revenue comes from domestic charters which is say Chennai Bangalore or Mumbai Ahmedabad or whatever and but 75% is international so they go they fly to some 26 different countries uh this this is the exact same split for uh dry lease and wetly. My sense is today dry lease handles only domestic because it is you know correct to a decimal point and wet lease handles all their international it's anyway I think that's just an academic thing over time that will shift

34:55 as they add more uh dry now for the new aircrafts that they are taking they've already uh or just to give a sense of the timelines they say that they have already paid deposits for two aircrafts which should come in another 1 to 1.5 months essentially by August uh Another two will come by the end of this calendar year and the last two will come by the end of this financial year. So they are confident that by March FI20 that is the last month of this uh financial year they will have seven dry aircrafts. Now AFCOM which is a promoter group company has seen a lot of delays uh and despite you know all the execution in the case of the air airline industry you have some uncontrollables which is the regulator and there will be delays. So take those numbers with a pinch of salt. U now their numbers have

35:41 been absolutely amazing. They have done almost 195 cr. This is their fifth year of operation. To become a 200 cr business is no joke. They're doing this with 15% pat. They grew from 105 to to 195 which is almost 80% plus last year. Uh so absolutely fantastic uh numbers. Their balance sheet is also not bad. Whatever cash flow so their cash flow is kind of flat is like close to zero. But most of that if you see is just down to the deposits for the new aircraft. So for two of the aircraft they've already paid the deposit from their own funds and that is why their cash flows are like neutral otherwise it would be 13 14 cr in the green. Uh now their projections uh you can like in a bunch of interviews the promoters have indicated how much a single aircraft will do. Uh their estimate is that one

36:28 aircraft will do conservatively around 60 to 65 cr per year. uh they it it should be higher than that as well and when you factor in higher international and uh the fact that they're going to go into some other geographies not just Chennai there are a lot of larger geographies that they are trying when I say larger I mean like a Mumbai or a Delhi or a Bangalore where your realization will be even higher so I think there is a lot of upside too if they're able to execute but broadly if you go with that 60 65 cr number I had done some rough math and uh my uh so I had taken a uh average case and bull case bull case is unlikely to happen but I just done that you know based on what they said my sense is they should do around 323 around 330 cr for this year

37:14 with around 55 PAT or so for FI26 and they can do just one second I'll just uh double check that number yeah and they they can do if they get all their aircrafts by FI27 even if they get it by Q2 of FI27 they can do about 600 cr for next year with like north of 100 cr that in a super bull case scenario they can even do 380 390 for FI26 I I think there's like a 5% chance of that happening but this is the numbers that I think they are trying to hit which would be 65 to 70 PAT and FI27 can be 650 plus so the growth trajectory profile subject to them executing uh is absolutely amazing these are the kinds of bets I think as investors we look for we look

38:01 for promot motors who are you know growing at breakneck speed who have taken another company and grown that at breakneck speed. So there is proof is a little bit like let's say the KP group right where KP gel came after KPI green uh after the KP green and KPEL and how quickly the market valued the the third company that came from that group just because of the success of the other two. So you have that perfect storm, a a very very aggressive promoter uh with some, you know, proven execution. Even in this company, they've done extraordinarily well. Uh I think it's a obviously it's a no-brainer. There are no sellers at all in gray. Uh it will most likely be a crazy listing. Uh they the stock before

38:49 that the stock is coming at 13.5 times. Uh even if this lists at 90 it would which sorry yeah even if this lists at 90 it would be 25 times. It's a very funny anchor book with Rajasthan Global and LRSD which is effectively the same person uh taking almost 70% of the anchor 68 69% of the anchor book. Uh but I understand that they're also close relationship with acom 5bs and I've been very early backers of them. So it's almost like that uh AFCOM I think don't need to say much. It has been a huge success for several of us. Uh anyone who's holding it from listing is up. Uh uh so to me I personally am very comfortable buying this and squatting on

39:35 it. Uh the promoters have done a great job. One thing to note is the promoters have are highly diluted. They will I think only on about 32 33%. uh but look at it like a startup. If a startup uh typically will dilute a lot but will also show a stunning growth trajectory and that is what this kind it's not like they've diluted 30 you know 60% and are like in 20 years the revenue is like 100 cr right it's a three four four year old company at doing 200 cr in revenue profitably so I am very very b bullish on this company uh certainly for listing there's no doubt I think this is one stock which people can think about holding for longterm as well uh one more point probably is that just be very prepared for a thriller minute kind of

40:21 uh if you if you are a holder be prepared for a sequence of LC sequence of UC's. It's exactly what FCCOM does. Everyone will become a detective. They will analyze how many hours each flight flew each day of each week of each month and based on that the stock price will either do five UC's or 5 LC's as if the full fleet has been hijacked or you know all of the world's nice fly through flybs. It'll be it'll be chaotic. Uh but it'll be I think hopefully it'll be a very rewarding ride. Uh so I personally am going to apply and look to purchase this on listing also with a view to add something to my portfolio. >> Perfect. Thanks Rohit. Uh so you're saying there are just 120 private charters in India out of which this guy has three and is adding six more. So

41:08 that takes up the number to nine. >> Correct. And out of those 120 >> you would assume like most like more than 50% would be for captive consumption. So there are only very limited players who are doing it at a like uh taxing model for the lack of a better word like there would be very few of them and this guy would probably have the majority share if he's able to bring in those six planes. Correct. >> Correct. I mean he would basically go to about let's say 10%. would be higher than that right 20 because 60 I'm just assume key six uh he has like say seven charters with a total of 70 live that's about 10%.

41:55 >> Got it. Okay. So he's adding four now to the three current or is are they adding six now? >> He's adding six. He's adding two plus 2 plus two. So two now, two in another uh like four four months and two by the end of the year. >> Got it. And I had also spoken to like I had attended one of the preipo calls back in EPCOM days and I was very uh like I was very happy with the promoter quality. Promoter quality is topnotch. uh uh so definitely a lot of interest there and I I was reading one more good thing uh that these private routes jet roots uh they would essentially like and you are saying there are like close to 5,000 charters in US right so India is very underpenetrated compared to that so you see future there would be some uh

42:41 like scope of uh growth as well and this was also backed by a VC report where I was reading that top four uh roots in uh Southeast Asia out of top 10 four are in India with like uh Delhi uh Bombay Delhi Bombay being like the number one route in terms of like the movements of private private charters and so there is a lot of growth on that segment as well right it's a hot segment where but my question is like do you feel like other players haven't entered because it is so regulated that it is very difficult to get licenses or do you feel it is majorly because of like just not a lot of things are in your control in aine and things might start like it is a very fixed cost heavy business right like you need to pay that lease cost irrespect of whether you are flying

43:27 the planes or not you need to pay for the fuel you need to pay for fuel is still you can say variable but you still need to pay salaries etc maintenance all of those things correct yeah no doubt it is like see right now this is what I how I look at is they are getting very early into some of the segments in aviation where there is a large mode and there is like a timebased sort of uh uh advantage. So that is is their play. I think they've proven that in AFCOM. Uh there are a lot of niches where a full-fledged cargo plane or things that only a full-fledged cargo plane can do and not what a belly hold of a passenger aircraft can do. For example, mobile phones, right? Cargo

44:14 only cargo planes can uh can transfer mobile phones. You cannot do that in a passenger plane because of the battery. And so the way let's say there's a blue dart or a FedEx there's only so much that they can cater when mobile phones has exploded uh as a category thanks to e-commerce. So these guys are finding very interesting I'd say timing in niches. I'm you're also a little bit counting on the promoter that you know these guys are identifying these trends early. you know that the number of USNI people corporates that that pre ultra premiumization team is playing out very very well and they've given a lot of justification in the RP also of how a first class flight is equal to the cost of a private jet with all the uh benefits of a private jet you don't have

45:00 to stand in line and you know the entire plane is yours and so on so there is a value for money equation here for the ultra rich so I think we're just trusting that they are catching that trend early there are obviously business execution risks But you take a bet on a promoter who has extreme depth in the segment and count on you know him to to keep executing as he has done so far. It's not even like a bet on day zero. This is a 200 cr company with 30 cr pack. So there is a lot of proof as well. So I still feel there is at least a couple of years. One one challenge with this segment compared to AFCOM is cargo is an infinite market infinite time business whereas private jet leasing is still in my view not there yet in India. So there there is somewhat

45:45 of a cap in my view there but let's see how it goes. I still feel you got in early enough that we are not going to hit that cap in the next 1 two years after that it will probably slow down in terms of how fast this company can grow. If they 10 15% market share it will cap how fast they can grow. I feel at that point cuz the entire segment may not grow at like the space like when you have a cargo cargo business with let's say a 50 billion TA versus this with a 500 million T you will kind of get capped but I think we have a long way to go as a small company. >> Got it. Uh when you said mobile phones have ex exploded the image was not of like I thought they literally exploded in the flights but >> no no that it's for that risk that mobile phones aren't allowed on

46:30 passenger airlines but I'm saying those are like little niche things that make a difference right if you're investing in >> yeah my what do you think are the risk factors because again I will go back and say that I'm not I'm a beer on airlines simply because airlines you can do everything right and then something can go wrong uh where your fleet type gets like grounded for no reason and then you are stuck like and it becomes at that moment of time it becomes a life or death situation because you uh can go out of cash flows very soon cash flows are king and it is very important for an airline company so I would just go ahead and say that that is a big risk which I feel like it can happen with airlines I'm always very cautious but also that's because if you work in a company long sector long enough you become cynical of

47:16 that But yeah according to you what are your risks per say one is this then second I feel is the dilution uh already 70% diluted at this stage any other risk that you can think of >> yeah see there is one other risk in aviation which is something that you were alluding to right which is so there was this company called Tania aerospace which had a small chartering business too uh some 4 five years ago and their planes skied off the runway and with that they just shut down their chartering business now I don't know the details who blamed what pilots did but and luckily nothing happened. there was no uh casualty but it's a problem with the plane right if something goes wrong it's a problem for Afcom also something goes wrong a tragedy is a

48:01 tragedy and that can be very difficult if you're unless you're going it can be very difficult to recover from something like that so I think there is a very core risk there generally risks like fuel and all my understanding is they get passed on fully uh so what they mention is if there's a 5% fuel up or down it will get passed on to the client so it's part of the contract as big a risk though Maybe the maybe there's a chance the demand will reduce but I think there are some you know the core risk will just be the airline risk certain cyclicality certain risks with just flying as much as you are all about safety if something goes wrong it goes wrong and that it will be very hard for a you know private jet kind of player to recover from so those are definitely things to be wary about but yeah I think I'm still a little more bullish overall

48:47 you know like some of these things are just things you can't and you little bit have to trust that the promoter will take care of it to the best extent possible and where do you get this kind of growth 80 90% at least for next 2 three years coming at reasonable valuations you know with proven promoters so that's the reason I'm personally quite bullish >> got it no be applying for I think yeah makes sense I would also be it's a no-brainer at the price at which it is coming but again those risks are something which need to looked at like I feel airlines in the long term somehow don't do so well but yeah that's just me. Uh so with that we've kind of covered fly SBS and we can

49:33 probably move forward unless anyone has any questions. I see a couple of questions with respect to uh jets being bad for the environment and if that is a headwind for the industry industry so niche that I don't and plus it's a essential service right end of the day like people will continue to fly so I don't feel that is that big of a risk in terms of like how are they covered for tragedies there would be some insuranceances but because these like the numbers are very small right the the guy's doing like the company's doing like six planes something goes wrong and one goes out of service that hampers your revenue significantly, right? So, and that's the problem with these companies, right? These are operating airlines operate at six sigma level, right? Or even higher. The chances of fatality are so low. But if that

50:20 happens, then that's the end of that uh plane or essentially very bad for the company as well, right? So, so those are the chances which you are taking. But I'm assuming no investment is risk-free, right? So with that uh it seems like a good bet. Um Sachin to anything to add or we can move on to the next company. >> Uh just that for the new aircrafts that uh utilization will be less around 65 to 60 hours and for the already existing ones they'll they are likely to scale that to 70 plus hours. So they're possibly hitting that 400 CR mark. Yeah, I'm assuming it would be because

51:05 of when they start with the new planes, it would take them some time to ramp up, right? And because in this demand is also slightly difficult to predict and get, right? So, it will take them some time in order to pick up the demand. >> I'm assuming Ro would have covered that when he was predicting revenue. But anyways like generally yeah see generally what they say is that they try to get as much demand ahead of time before the operations goal is obvious but when you're adding two new aircraft you will and let's say you know you're going to add it of October you will make sure that first quarter you have enough so that is the again it's it's what they have proven something that they maintain there also and you're trusting that they will this again but they are very

51:51 confident about meeting demand initially and then I think as a business so but yeah there be a initial overation I kind of assumed that already >> all right >> for this anything to add or we can move forward to i company >> no nothing much to add because everything is you know well covered I just remembering the firm thing you We were very very bullish at that point and we even had commented and actually it happened in like less than 12 months if I'm not wrong. So expecting you know it will not go that way because time of a player like

52:37 FCOM is is like very very large. This has a limited time. But you know when that when the economy when an economy like India has has started going from the developing to the developed part which takes like roughly 20 25 years the biggest uh what we can say achievers or growth uh sectors are this luxury ultra luxury um mid premium or you know so these segments tend to grow by at least like two and a half times of the GDP. So I expect that we say that time is smaller. Yes, it is smaller but it's growing at more than enough rate which would you know let the company to you know push push that growth which was

53:24 earlier in the coming future also. >> Got it. Perfect. Uh next company mainboard highway infrastructure the order is slightly haywire. We wanted to cover it in like in the schedule in which companies are coming. We'll come back to it. But yeah, setting up highway infrastructure uh incorporated in 1995. Company is a Indian infrastructure development and management company engaged in tollway collection, EPC projects and real estate development. Uh so it specializes in construction and maintenance of roads, highways, bridges and residential uh projects. Setting up the IPO, it's a 13 road IPO. Very very small for a mainboard IPO. So expect crazy subscription. Don't even look at the subscription and everything would be

54:11 free uh from the fifth IPO to go back into this on seven. So expect out of the whole subscription for the lack of a better word but around 97.5 isue or 33s. So 100 fresh market 52. So they're diluting like close to 26%. FI25 financial revenue 504 crores 22 crores. So 22 crores per 502 crores market cap company. So it's coming at like 23p if I'm not wrong. LM is pento capital main board 23p

54:57 infra infra but that is what my complaint of the segment is. What do you turn to talk about highway infra? >> Uh is my voice clear? >> Yep. >> So Highway Infrastructure Limited is a indoor based toll collection and EPC company. They also have a very very small and minute chunk in real estate but that's in very very unconsider insignificant. So the company operates and manages tollways okay for highway projects which are awarded through the uh bidding. So as you know key APC bidding is like L1 uh you have to bid with your competitors and if your bid is the lowest you get the uh you are awarded the uh contract. So the company

55:44 till now has executed 27 toll management projects and at current point of time the company executing four. Uh now you need to understand one thing is the these projects are just of one year. Okay. It's not like your collection end. So it's not a sticky revenue like IRB kind of a player. So till now in EPC segment a company has executed 66 projects or completion but mind will EPC I just seen the ticket size and majority projects are in that more

56:36 around 20 cr 30 currently the company has an order book of 666 36 crores out of which tollway has 59.5 and 60 um 6 is your EPC. Uh now I'll tell you just revenue split 25 tollway collection was 78%. EPC was 20.7% and real estate was like 1.2% appro this is of the operating level. Now one thing which comes in your mind is key if I'm saying toll 78% and EPC 20 7% I said but order book 666 order book

57:25 59.5 which is like 9% only now I'll tell you why is this project from roughly roughly June July August August, September, October and partly November. After listing, we would get to know at this point we only know the EPC stuff EPC order book. I I told you that is like 607 crores to uh that is like ex roughly roughly estimate

58:10 27. So that is not your complete revenue which will get recognized recognition. I expect part completion that should be case to case either project completion method I have to recognize just as a company also intends to go into h which is your annuality model in future so if I'll just read out currently project which are ongoing first is your Amraati second is your sirohi project which is near u I'm not able to get the name of this city. So the second one is Sirroi. Third one is Kiratpur which is in the highway of Aligard and Kpur. Okay. And the fourth one is Vishan

58:57 which is Javalpur and Bopal. The company is raising 130 crores out of which 97.5 cr is a fresh issue and 32.5 crores and OFS. Uh in the fresh issue the company is allocating 65 crores towards working capital and GCPs 32.5 crores. to I'm not able to get split because GCP and 1/3 is working capital maybe post reducing the IQ expenses so that is nothing much to do but I felt GCP come on it's financials FR23 the company did a revenue of 457 crores with a PAT of 13.8 8 crores to roughly kind of a

59:43 pat margin. F24 the revenue jumped to 576.6 cr. I'm saying total revenue not from operations to other income plus total uh uh uh operations uh income from operations plus the other income total 576.6 which is a 26% growth and PAT is 21.4 crores. Okay to Aida is like 6.7% approx. And FI25 the company did a revenue of 504 crores. which is a degrowth of 15%. Okay%venue and the is 22.4 cr 21.4 on 576 revenue is like 22.4 4 crores but in Aida margin 6.3% only one will say

1:00:32 aida margin has fallen 40 bips but the pat has increased with 15% decrease in revenue so I'll come at that point after like 1 minute to company at a market cap of 502 crores f25 p 22.4 4 I'll tell you key component so other income if you look in the P&L F 23 it was 1.7 cr 24 it was 3.1 and 25 was 8.8 date first of investment properties 2.8. So this is like completely a new item for feature of performance security

1:01:17 deposits for of the subcontractors which is 1.8 crores or ribbit renewal deposits and miscellaneous income. Now I'll tell you majority times they are what we can say they are not recurring in nature let's say so you can understand one thing I what I know partial that we need to understand because payable they are doing like 100 cr

1:02:04 revenue so that is justifiable so tollway collection subcontracting I have no major idea but I don't expect majority subcontract contracting should be on the EPC part so uh if I just adjust the PAT okay after doing that other income adjustment or buy 19.7 frankly but this has been mentioned into one of report I'll not take that number to 18 but I'll trust what those guys are doing because on that basis

1:02:50 I type. Now coming on the risks risks of the company management for 23 it was 30% but collection that is a one time thing. So I felt winning

1:03:36 understand the growth to the market I have some less idea but hoping that they'll go aggressive in the bidding but for sure the bid winning ratio is going to go down generally those cash flows cash flow in the 10.8 positive operating level in F24 FIR 25US 6.6 I'll tell you one thing when you look at

1:04:23 the working capital data because if you might have checked 25 the reason is working capital one very important thing to note public newspaper advertisement which was certified by the charted accountants I had raised a query and I asked to one of the team of the clarification 2450 but frankly speaking because I'm not saying

1:05:10 that is in hand because we were expecting future but chartered accountants because consolidation this is not wrong because consideration that's a valid reason but I felt and if I just check% revenue or 666 precisely which is expecting it's achievable% of

1:06:00 the order is very reasonable that is like not in our hands but was 105 types and EPC working capital requing let's say 70% 65

1:06:46 even management business because generally these businesses are not so I feel they are paying roughly which is like 1/4 of your P&L at PBT level for sure. Okay. First is your sorry

1:07:31 because that is a proper management company you have to understand after tax. there's no relation at least in terms of size of the business and if I just checked

1:08:19 Second is for the proper infrastructure management is a small part of their we'll consider who are we to judge 13.6.6 not it's not a correct platform.

1:09:11 rel see one good one good thing in this sector automatic number plate recogn And if I just look at their numbers 5 to 64 95 and industry is growing at 17% 17.4 four precisely for from FIR 24 to 29 which is which is uh which report is already

1:09:56 publicly available. So I felt for a industry like management actually pretty good but but one very interesting thing I looked into this company retail is 40%. I don't know. I might be judging but I felt maybe demand is not there. I have no much idea but certainly

1:10:41 selling that is for sure because retail retail 39.5% But I felt if it lists at I'm not saying it will list I'm just giving an assumption one good two two three good things is like first litigations tax proceedings criminal far better and so that highlights a good corporate governance. Um I heard to it third promoter Mr. like 2 three days

1:11:28 back and I felt the guy was pretty pretty good Pennsylvania very young and dynamic he has you know good hold towards technology and has some very optimistic ideas so I don't know the rest two promoters Mr. But at least the third promoter is very young. I felt he was a good guy. But that is very normal in this business. So that should that is just a risk but not a negative I would say. So, this is like your proper typical

1:12:14 retailer favorite IPO to size is doing decent guidance. But at least stock is doing decent quality power that's very close to my heart. I felt this IPO is just a listing play and don't do much. I'll tell you the reason if you look at the working capital it looks like because if you look at the working capital almost

1:13:09 assuming Best% working capital requ very very high that's impossible and the company itself doesn't knowul% 40% so even the management doesn't know they might be giving any numbers you know I also have the numbers I have the estimates but I felt that that is like

1:13:56 very what we can say not a mature thing to share this because if you want to consider this company for longterm July or August or September wins for So my view is very clearing because you have no certainity towards revenue. I'm not saying bad because But that's not enough.

1:14:45 I'm not happy because bit sorry 13 times are 10 times I know price has has nothing to do with but because overall it's just I'm listening by thanks I just have one complaint I shouldn't have done this before

1:15:31 covering. Thank you for covering it in detail. question from my understand is it inframe is that what I know because I have seen the two projects I have no idea but I know it's a proper I'll consider if it is there.

1:16:18 out of the RHP the state but not mentioned in RP towards toll with I'll me I'll be mentioning that >> they have some portion B we are going for or ham and toll but not entirely >> and one more one more small thing actually I forgot to cover in this company was a ham side the company's intending to go into ham your hybrid annuity model and I feel the size of the company reserves because it increases your margins for sure. But it's a cash flow eating business because let's say 15 years, 10 years, 12 years, 8 years. But I know that's not everyone's cup of

1:17:11 tea. I felt I have no idea. We have seen seagull limited which came like last year IP even though it was growing at 40% for like four years and this business 3% business so I would you know like it to after listing. Got it. Yeah. With that we have covered highway infrastructure and we'll move forward. The next company we'll talk about is Joti Global Plast setting up

1:17:57 Joti incorporated in 2004. Company specializes in plastic molding solutions and manufactures polymer based packaging containers. Uh so plastic containers it provides various products such as packaging containers, automative parts, toys and drone components which is a like future story. We'll talk about it. Setting up the company 35.5 crores fresh issue out of which 28.5 is a fresh issue and 7 crores offset company market cap 131 crores. So they are diluting like 30% of the uh company. In terms of the financials FI25 financials revenue 93 crores and pad 6 cr so they are coming

1:18:45 at like 22p 21.5 22p which seems high at a at a starting level pos but yeah we'll talk about it in terms of the LM the LM is unis store. So with that let's try and understand and talk about uh Ji global. So majorly plastic or FRP molding plastic products. So plastic products drums can in terms of plastic it's a very very old

1:19:35 company. it was incorporated in uh it was incorporated long back and then they converted it to uh like uh something like that because I know it's a third generation business which uh the business is being run right now first and second generation business because of the third generation entry there's some story building towards that but we'll kind of talk about that when we come to that but mainly which is these plastic packaging manufacturing So right because uh unit one and unit two functional right now uh IPO is being done to bring

1:20:22 in unit 3. So unit one and unit majorly uh the capacity at which they are operating uh at right now is close to 88%. uh 83% 88 but consistently so they are already at at almost the full capacity which they are using right now in revenue around 93 crores that pretty much it what it can come from unit 1 and unit 2 but they are also doing a capex just say unit 3 which will essentially be the same capacity as unit 1 plus unit 2 so double capacity but again that's slightly later in the FI2 like FI 26 FI 26

1:21:08 right full capacity already and it's coming at like 22 to 83 P3s company FI23 3 may around 89 crores top line just uh bottom line was somewhere around uh 2.3 crores FI 24 company 87 crores just my bottom line was 3.6 crores fi 25 93 crores just my bottom line is 6 crores so around uh pat margin is around 6.57%

1:21:54 and aida margin is around 13%. which at least at a high level looks slightly higher for a plastic molding manufacturer because the competitive industry right there are multiple companies which uh do uh this kind of business right but and it's been on an increasing trend top line has remained pretty much what it is although you'll discount it simply because like IP that's when the company wants to show its real worth so you'll kind of agree with that number so they have done like somewhere around six year the only issue is FI27 maybe at least plastic business probably 10% growth is what you can kind of consider. Now I'll come to the novel part of this business. Basically this business uh the new uh promoters the third generation uh who is the currently

1:22:42 the CFO of the company uh Karan Cha has brought in a new angle where they have also started manufacturing parts for drones and defense which is what is majorly being defense aerospace majorly drone parts for defense and aerospace which is majorly being uh like sold as the story so far and the promoters good we had uh like uh we saw a couple of interviews online. There are a lot of interviews online available by the way.

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