Skyways Air Services IPO faces investigation risks despite strong market interest

Skyways Air Services is preparing for its stock market debut following a Rs 582.8 crore initial public offering (IPO). On the final day of bidding, the company saw a grey market premium (GMP) of approximately 33 per cent. The IPO has a price band of Rs 131 to Rs 138 per equity share and consists of a fresh issue of up to 2.89 crore equity shares alongside an offer-for-sale of up to 1.33 crore shares by existing shareholders.

Despite the market interest, the company’s Red Herring Prospectus (RHP) discloses significant legal risks. Skyways Air Services and its subsidiary, Brace Port Logistics Limited, are subjects of an ongoing investigation by the Delhi Economic Offences Wing (EOW). The investigation follows a complaint from UK-based PG Paper Company Limited regarding allegations of fraud, over-invoicing, forgery, and criminal conspiracy.

According to the RHP and representations made to the Securities and Exchange Board of India (SEBI), PG Paper alleges that Skyways group entities secured freight business through coordinated actions involving bribery and misrepresentation. The complainant claims that business exceeding Rs 800 crore was conducted through three subsidiaries since 2021, with estimated direct losses of at least Rs 44.20 crore.