Pawan Hans firms up modernisation plan ahead of going public

Copter service firm plans to hit bourses by end-2017 or early-2018 to raise around Rs 350 crore

Indian government-owned helicopter major, Pawan Hans, is fast-tracking its public listing plan, even as it sees new avenues of growth in the regional connectivity scheme (RCS).

The company, which is planning to hit the market by late-2017 or early-2018, has firmed up a new business plan to make itself attractive to investors, ahead of the proposed listing.

The copter service firm has finalised a business plan, which it expects will increase its revenue to Rs 1,600 crore by 2027, from Rs 500 crore in 2015-16.

As per Chairman and Managing Director (CMD) B P Sharma as part of the new business plan, the helicopter major wants to increase its fleet size, diversify its business, professionalise its governing board and invest more in maintenance, repair and overhaul. Civil Aviation Minister Ashok Gajapathi Raju had earlier said the public listing will help Pawan Hans increase its transparency and efficiency.

The company plans to raise around Rs 350 crore and could see the Oil and Natural Gas Corporation offloading a major part of its 49 per cent stake, said sources in the civil aviation ministry. The central government holds the rest 51 per cent stake.

Our initial public offering (IPO) preparation is in full throttle. SBI Caps is doing a risk assessment study for us and we are awaiting the report; CMD Sharma said in an interview. Further, he said that by March 2017, there will be a concrete proposal.

Sharma is upbeat about the good business environment, in light of the RCS, saying he will be aggressive in participating in the scheme.

Helicopter travel was somewhat restricted to VIP movement but now we aim to make this as a main mode of commute for the common man, Sharma said. From the money raised in the IPO and with some financial help from the government, the company has decided to spend Rs 4,000 crore to increase its fleet size to 83, from the current 43, by 2025. With new helicopters replacing older ones, we will have to buy close to 100 helicopters by 2022, Sharma said, adding the company is in initial stages of talks with Bell Helicopters and Airbus Helicopters for buying new aircrafts.

Diversifying its business, the company plans to provide airline connectivity in the Northeast through fixed wing aircraft and seaplanes, with financial aid from the North Eastern Council. According to Sharma, “Northeast is a region where the company already has a strong presence through helicopter service. We plan to connect the northeastern capitals as well.”

Pawan Hans is a Miniratna-I category public sector undertaking. It has cumulatively flown for more than 700,000 hours and has had 2.5 million landings since formation.

The company has a fleet of 43 helicopters.

In addition, it also operates and maintains six Dhruv helicopters, belonging to the Border Security Force and Hindustan Aeronautics. Pawan Hans provides helicopter support, with 10 copters for offshore operation.

The company’s IPO plan faced a hurdle due to past loans taken from the government, which it could not repay. Sources said the finance ministry has agreed to convert the loans into equity. Sharma said. the matter is in advanced stages of negotiation.

GROWTH PLAN

• Pawan Hans aims to increase its revenue to Rs 1,600 crore by 2027, from Rs 500 crore in 2015-16
   
• It sees new avenues of growth in the regional connectivity scheme (RCS)
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• The helicopter major plans to increase its fleet size, diversify its business, and invest more in maintenance, repair and overhaul
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• Currently, Pawan Hans has a fleet of 43 helicopters. It plans to invest Rs 4,000 crore to increase its fleet size to 83, from the current 43, by 2025
  

 

With new helicopters replacing older ones, the company will be buying close to 100 helicopters by 2022
 

Pawan Hans is in initial stages of talks with Bell Helicopters and Airbus Helicopters to buy new aircrafts