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Wadia Group owned Go Airlines files papers for Rs 3600 crore IPO

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Go air
  • After taking to the skies 15 years ago, the Wadia group-promoted budget carrier -- which has ambitious expansion plans -- is looking to mop up the quantity through the issuance of fresh equity shares.

NEW DELHI: Go Airlines, which has rebranded itself as ‘Go First’, has filed preliminary papers for an initial share sale worth Rs 3,600 crore and therefore the proceeds are going to be mainly wont to repay dues amid the aviation industry facing strong headwinds thanks to the coronavirus pandemic.

After taking to the skies 15 years ago, the Wadia group-promoted budget carrier — which has ambitious expansion plans — is looking to mop up the quantity through the issuance of fresh equity shares.

It also has plans to boost up to Rs 1,500 crore by way of a pre-IPO placement. Once the shares get listed, Go Airlines (India) Ltd are going to be the third operational scheduled carrier after SpiceJet and IndiGo to trade on Indian bourses.

In a release on Friday, Go Airlines said it’s filed a draft red herring prospectus (DRHP) for an initial public offer (IPO) to boost up to Rs 3,600 crore through the issuance of fresh equity shares.

“We expect competitive conditions in our industry to accentuate further as new entrants emerge and as existing competitors seek to increase their operations and flight frequencies over routes that we operate,” as per the DRHP.

It also noted that the aviation industry faces significant business challenges as a results of the COVID pandemic.

In the fiscal year ended March 2020, the airline had a loss of Rs 1,270.74 crore while total income stood at Rs 7,258.01 crore.

“Our company expects to receive the advantages of listing of the equity shares, including to reinforce our visibility and our brand image among our existing and potential customers and to make a public marketplace for our equity shares in India,” the DRHP said.

From internet proceeds of the IPO, the airline plans to pay over Rs 2,015.81 crore towards prepayment or scheduled repayment of all or some of certain outstanding borrowings”.

An amount of Rs 279.26 crore would be for “replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft, with cash deposit”, as per DRHP.

Also, the airline will make repayment of dues of Rs 254.93 crore to Indian Oil Corporation for fuel supplied thereto .

“A further issue of equity shares, through a preferential offer or the other method as could also be permitted in accordance with applicable law, aggregating up to Rs 15,000 million, which can be undertaken by our company before the filing of the Red Herring Prospectus with the RoC (Registrar of companies),” it noted.

The Wadia group owns a 73.33 percent stake within the carrier while the remaining shareholding is with other entities, including Baymanco Investments.

The latter holds a 21.05 percent stake. Others are Sea Wind Investment and Trading Company (3.76 percent shareholding), Heera Holdings & Leasing, Nidhivan Investments & Trading Company, and Sahara Investments — all the four entities have a 0.62 percent stake each within the airline.

As per the DRHP, there are a complete of 99 litigations against the corporate , including 43 associated with actions by statutory or regulatory authorities.

Global coordinators and book running lead managers to the difficulty are ICICI Securities, Citi, and Morgan Stanley. The airline is now that specialize in the ultra low-cost carrier (ULCC) model.

After announcing rebranding on Thursday, Go First CEO Kaushik Khona said the airline has stayed resilient during the really tough times of the past 15 months.

“Even because the times still be extraordinary, Go First sees opportunities ahead. This rebranding reflects our confidence within the brighter tomorrow,” he had said.

The airline has placed firm orders for delivery of 144 Airbus A320 neo planes; and out of them, it’s taken delivery of 46 aircraft.

As on January 31, 2020, GoAir operated flights to twenty-eight domestic and 9 international destinations. at the present , three scheduled carriers are trading on the domestic bourses — IndiGo, SpiceJet, and Jet Airways. Jet Airways shuttered operations in April 2019.

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