Global Vectra Helicorp is one of the largest dedicated offshore transportation services helicopter companies in India servicing the Indian oil and gas exploration and production sector. The company had 14 Bell 412 helicopters as on September 12, 2006. Each has 13 passenger seats and two pilots seats. There are 44 pilots and 19 aircraft maintenance engineers (AMEs). The average age of the helicopters is approximately 12.5 years. Global Vectra Helicorp transports crew and cargo for oil and gas companies to offshore oil platforms located approximately 50 to 100 nautical miles from the coastlines of India for their exploration and production activities

Incorporated in 1998 as Azal India Pvt Ltd, the company was taken over by the Vectra Group in October 2004. The promoters of Global Vectra Helicorp are Vectra Investments Pvt Ltd (VIPL); Azal Azerbaijan Aviation (AAA), Ireland; and Ravindra Kumar Rishi, a UK citizen.

The issue consists of 7,00,000 shares on offer for sale by AAA and 28,00,000 fresh shares. The funds from the fresh issue will be utilised for fleet expansion by purchase of four Bell 412s helicopters and two EC 155 B1 helicopters at a total cost of Rs 211.96 crore; building a hangar at the Juhu Aerodrome, Mumbai, at Rs 8 crore; conversion of six Bell 412 helicopters to meet AS-4 (aviation standard) requirement at Rs 5.48 crore; and retirement of Rs 18.99-crore debt of Vectra and AAA. Global Vectra Helicorp has tied up for borrowings of Rs 148.37 crore to fund the debt portion of the project.

Strengths

• Global Vectra Helicorp is in the industry for over the eight years. Clients have grown from one to five. The company’s contracts range from one to three years. It has a three-year contract for nine helicopters with an Indian oil & gas major from May 2006. A six-helicopter contract has been entered with Reliance Industries, Gujarat State Petroleum Corporation (GSPC), Transocean, and British Gas Exploration and Production India (BGEIPL). For 10 of the 14-helicopter contracts effective from May 2006, Global Vectra Helicorp is protected by air turbine fuel (ATF) price escalation clause. These contracts give good revenue visibility.

• Global Vectra Helicorp is the only helicopter company in India certified to undertake the 3,000-hour/ five-year check on the Bell 412 helicopter fitted with Pratt & Whitney PT6T-3 series engines. This in-house capability enables the company to reduce the downtime for repairs on helicopters, as they do not need to be taken to outside agencies, leading to enhanced serviceability of the fleet.

• With its fleet, Global Vectra Helicorp is well placed to tap the growing offshore oil and gas exploration and production market, which has further buoyed by New Exploration Licensing Policy (NELP): private players are working along with national oil companies along with global players. Currently, approximately 29 helicopters are engaged in the offshore transportation services in India. With the induction of the Eurocopter EC 155B1, the company will be able to service long-range distance as well. It is planning a fleet size of 20 helicopters by December 2006 and 29 helicopters by end FY2009.

• Global Vectra Helicorp saw a fall in fleet serviceability from 87.12% in FY 2005 to 82.50% in FY 2006. There was a fall in the average revenue per hour from Rs 103812 to Rs 102771.
• The contracts with the clients are loaded in favour of clients who can terminate them at short notice without much penalty.

Global Vectra Helicorp’s business is basically asset-led. Growth in FY 206 was led by expansion of fleet from six to 11, which is planned to go up to 20 in FY 2007, to 24 in FY 2008 and 29 in FY 2009.

FY 2006 EPS on post-IPO equity works out to Rs 5.6. At the price band of Rs 175– Rs 200, PE is 31.4 to 35.9. There are no listed players in the helicopter transport service. It will be better not to compare this company with normal airline companies as the business models and market scenarios are entirely different. Offshore service providers like South East Asia Marine (engaged in offshore support vessels) and Dolphin Offshore (engaged in diving and underwater fabrication and repair services) are traded at TTM P/E of around 12. While visibility about the company’s growth prospects is high, the asking price is also very high.

Global Vectra Helicorp: Financials