Go Airlines (India) IPO - 7 Things to Know About

One of India’s major air carriers, Go Airlines, is planning to hit the IPO market. While the DRHP had been filed some time back, it has just filed an addendum to the DRHP which includes some additional items of payment in the utilization of fresh funds. The entire IPO will be a fresh issue.
 

Here are Seven Interesting Facts to Know About Go Airlines IPO

1. The Go Airlines, part of the Nusli Wadia group, has been flying domestically in India for nearly 17 years now. As per the latest numbers put out by the Directorate General of Civil Aviation (DGCA), Go Airlines had a market share of passengers at 9%.

This puts them almost at par in terms of market share with Vistara, Spice Jet and Air India.

2. Go First, formerly Go Air, is the core business of Go Airlines Ltd. It plans to hit the IPO market with a fresh issue of Rs.3,600 crore. There will be no OFS component in the IPO and the entire IPO amount will result in fresh inflows of funds into the company and also dilute equity.

The public issue is reported to open on 08-December.
 

3. Go Airlines has a fleet inventory of 56 aircraft and covers about 28 domestic and 9 international routes. It is gradually coming back from a testing 2020 and first half of 2021 when airlines had been asked to operate at skeletal capacity.

This meant inadequate absorption of fixed costs resulting in huge losses.

4. The company has been consistently making losses but the losses sharply widened in 2020 and 2021 due to a sharp fall in aircraft churn.

In the first half of FY22, the company has already reported a net loss of Rs.923 crore so the overall losses could widen for FY22 as the CASK (cost per average seat kilometer) continues to be much higher than the RASK (revenue per average seat kilometer).

5. The company has accumulated substantial debt and lease outstanding and it will use the proceeds of the IPO to reduce the same. It will prepay loans, replace letters of credit to secure lease payments and pay fuel supply dues to IOCL.

In the addendum, it also added payment of outstanding lease rentals to lessors and payables for MRO activity.

6. In the first half of FY22, revenues doubled YoY to Rs.1,202 crore on better capacity utilization. Domestic passenger traffic is expected to grow at 45-50%, so even if Go Air maintains its market share, it will still see a spike in its top line revenues.

7. The issue will be lead managed by Citigroup Global, ICICI Securities and Morgan Stanley India. Link Intime will be the registrars to the IPO.

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