Tuesday, February 09, 2021

GoAir revives IPO plans, Wadia group may dilute 30% stake in the airline

New Delhi: Budget airline Go Air, owned by the Wadia Group has revived its plan for a public offering of shares, which has been deferred several times since 2017.

The airline is planning to raise Rs 3,000 crore in an IPO and has appointed Citigroup, ICICI Securities and Morgan Stanley as the bankers, the Economic Times mentioned in a report citing a top Wadia Group official.

“We are looking at raising long-term funds and reducing debt. We have been told that given the current market sentiment, it is the right time to raise resources,” the official told ET. 

The Wadia Group, which operates businesses including Bombay Burmah, Bombay Dyeing, Britannia, National Peroxide and Bombay Realty, will likely dilute 30% of its stake in GoAir.

Due to the Covid pandemic, the budget carrier has been struggling to continue its business as its operations have been impacted while debt levels are rising. Bank funding has also become limited for airlines amid the pandemic. In last August, GoAir appointed Kaushik Khona as its chief executive officer, replacing industry veteran Vinay Dube.

GoAir operates more than 300 daily flights and had 8.6% share of domestic passenger traffic. The airline flies to 36 destinations, including 27 domestic cities. It has carried 80 million passengers since starting in 2005. 

According to the business daily, the company had debt of Rs 1,819 crore as of March 31, 2019 while its net profit stood at Rs 123 crore on revenues of Rs 6,262 crore in the previous fiscal.

Worth mentioning here is that if GoAir comes with an IPO its expected market capitalisation will be less than that of SpiceJet. InterGlobe Aviation, which runs Indigo, and SpiceJet had market capitalisation of over Rs 64,700 crore and over Rs 5,300 crore, respectively, on the BSE as of Friday (February 5). InterGlobe shares have rallied 80% in the past six months while SpiceJet shares have gained 90%.

08/02/21 ETNowNews.com

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