GoAir may follow IndiGo to market with Rs978 cr IPO this fiscal
29 Oct 2015
Go Airlines (India) Ltd (GoAir), the nation's fifth-biggest carrier by passengers carried, proposes to come out with an initial public offer (IPO) to raise around Rs970 crore ($150 million).
The Wadia Group-promoted budget carrier is planning to raise funds in the current fiscal itself, ahead of the expected arrival of 72 new Airbus A-320 planes starting April next year.
The funds raised through the initial share sale will be used for acquiring new aircraft and sources said the airline is likely to file the preliminary papers for the share sale soon.
They said the acquisition of new aircraft would help GoAir in its proposed international operations, which is at present on hold as it does not have 20 aircraft in its fleet.
For an Indian airline to start international operations, it should have completed five years of domestic operations and should have a minimum of 20 aircraft in its fleet.
GoAir has a fleet of 19 Airbus A320 planes and an 8.4-per cent domestic market share in the last quarter.
Bankers are reported to have made presentations to the company earlier this week, but details of the plan are yet to be known. GoAir also refused to comment on market speculation on its share sale plan.
GoAir is estimated to have made a profit of $14 million-$15 million in the year to March, which would make it the second most profitable Indian airline after market leader IndiGo, according to consultant Centre for Asia Pacific Aviation (CAPA).
GoAir, which commenced operations in November 2005, deferred taking delivery of its 20th plane, last year in view of the commencement of the delivery of new Airbus A320 neo (new engine option) from April 2016.
GoAir had, in June 2011, placed order for these 72 new A320s, valued at about Rs32,400 crore, with the European aviation major Airbus.
GoAir and IndiGo are the only two profitable domestic carriers. As of now, only two private domestic carriers - Jet Airways and SpiceJet - of the four are listed on the stock market.