Chartered Speed Limited IPO

01At a glance

What the company does: passenger bus services: it buys, operates and maintains buses, including electric buses, for inter-city and intra-city routes across six states, with over 2,000 buses, 650 pick-up points and 65 booking offices at June 2025 (DRHP p.24). It earns either ticket revenue from passengers or fees from state transport undertakings under an "annuity" model billed per kilometre (DRHP p.121).

Who pays it: state transport undertakings under the annuity model, ₹4,781.01 million of FY25 revenue, and passengers on its own routes, ₹1,596.36 million (DRHP p.121). The largest customer was 61.68% of FY25 revenue, up from 18.15% in FY24 (DRHP p.210).

Why it is raising money: ₹3,964.74 million to repay borrowings, ₹980.00 million for electric buses, and the rest for general purposes (DRHP p.25).

How fast it has grown: revenue of ₹3,321 million in FY23, ₹3,473 million in FY24 and ₹6,668 million in FY25 (DRHP p.27).

The one thing to understand: a turnaround built on one contract customer. Annuity revenue tripled in FY25 while ticket revenue kept falling; EBITDA margin rose from 14.38% to 31.62% and net worth turned positive for the first time in the three years, but one customer now provides almost two-thirds of revenue (DRHP p.27, DRHP p.121, DRHP p.210).

02The business, in plain words

A bus operator owns a fleet and either sells tickets on its own inter-city routes or runs buses for a state transport undertaking, which pays it per kilometre.

A state transport undertaking needs electric buses on city routes → it contracts Chartered Speed to supply and run them → the company operates the buses with its drivers and maintains them → the undertaking pays per kilometre billed.

The company billed 62.88 million kilometres under annuity contracts in FY25, up from 30.67 million in FY24 (DRHP p.121).

Earnings equation: Profit ≈ kilometres billed × rate per km + ticket revenue − fuel, drivers and maintenance − depreciation and interest. Fuel was 30.60% of FY25 revenue, down from 45.07% in FY23 (DRHP p.121).

03Where the money comes from

Source: DRHP p.121, DRHP p.210.

04The growth record

Source: DRHP p.27, DRHP p.121, DRHP p.340.

Our arithmetic: revenue compounded about 41.7% a year from FY23 to FY25; no profit growth rate can be given because FY23 and FY24 were losses (DRHP p.27).

05What the growth is made of

One large contract. Revenue from the largest customer rose from ₹630.31 million in FY24 to ₹4,112.69 million in FY25, an increase of ₹3,482.38 million, more than the company's entire FY25 revenue increase of ₹3,194.72 million (our arithmetic, DRHP p.27, DRHP p.210). Ticket revenue fell for a second year (DRHP p.121).

06Earnings quality

Cash is strong: operating cash flow was ₹2,079.61 million in FY25, helped by negative working capital of 71 days (DRHP p.121, DRHP p.340). But the fleet absorbed ₹5,242.50 million of capital spending in FY24 and FY25 (our arithmetic, DRHP p.268). Depreciation was ₹797.14 million and interest ₹582.32 million in FY25 (DRHP p.340).

07The balance sheet

Source: DRHP p.27, DRHP p.121.

Our arithmetic: net debt of ₹5,008.57 million at March 2025 was 2.4 times the FY25 EBITDA of ₹2,108.09 million (DRHP p.27, DRHP p.121).

08What the money is for

Source: DRHP p.25. A pre-IPO placement of up to ₹1,310 million may be made (DRHP p.25).

09Who is selling

Source: DRHP p.26, DRHP p.82.

10Promoters

The promoters are Pankaj Gandhi, Alka Pankaj Gandhi and Sanyam Gandhi (DRHP p.24). Three regulatory proceedings involving ₹0.60 million are pending against the promoters, who are also directors (DRHP p.27).

11Who already owns it

Source: DRHP p.26. The last row is our arithmetic.

12What changed just before the IPO

• Contract work: annuity revenue tripled in FY25 (DRHP p.121).

• Profit: first profit in the three years (DRHP p.27).

• Fleet: more than doubled since FY23 (DRHP p.121).

• Public company: converted to a public limited company, with a fresh certificate of incorporation dated 10 September 2018 (DRHP p.436).

• Share split: the face value was sub-divided from ₹10 to ₹5 in April 2025, taking the paid-up capital to 71,805,660 shares (DRHP p.37).

• No bonus: no shares issued by way of bonus in the year before the filing (DRHP p.37).

• Auditors: no change of statutory auditor in the three years before the filing (DRHP p.92).

13Capacity and expansion

Capacity is the fleet: 1,943 buses at March 2025 and over 2,000 by June 2025, with in-house maintenance facilities in Ahmedabad (DRHP p.24, DRHP p.121, DRHP p.210). The proceeds fund more electric buses (DRHP p.25).

14Market size and industry structure

The F&S report cited in the offer document projects India's bus population to grow from 2.40 million in FY2024 to 3.16 million by FY2030 and the mobility industry about 9.5% a year from FY2025 to FY2030 (DRHP p.24). Those projections are F&S's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• A leading bus operator with a self-owned fleet, citing F&S (DRHP p.24, DRHP p.120).
• Lower fuel share: fuel fell from 45% to 31% of revenue over two years (DRHP p.121).

Against that: dependence on one contract customer, state transport policy, fuel prices, and debt to fund buses (DRHP p.121, DRHP p.210).

16Peers the company named

None. The document says no listed company in India or abroad has a directly comparable business model (DRHP p.120).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One customer. 62% of FY25 revenue (DRHP p.210).
• Ticket business. Falling revenue (DRHP p.121).
• Debt. ₹5,180 million of borrowings (DRHP p.27).
• Fuel. Nearly a third of revenue (DRHP p.121).
• Contracts. Annuity work depends on state transport undertakings (DRHP p.121).

18Litigation and regulatory matters

Source: DRHP p.27.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Who the largest customer is, or how long its contract runs, in the pages read.
• What the ₹398.95 million tax and regulatory matters concern, in the pages read.
• Why ticket revenue has been falling, in the pages read.
• Which buses carry the debt being repaid, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Who is the customer that paid ₹4.1 billion in FY25, and when does the contract end?
2. What happens to profit if that contract is not renewed?
3. Why has the ticketed inter-city business shrunk for two years?
4. What are the ₹399 million of tax and regulatory claims?
5. How much debt remains on the fleet after the repayment?

1Sources and cited facts

This study was read from 1 document the company filed. The 49 figures it cites are listed under the document each came from, with the page and the sentence as printed.