Go Airlines India Limited GMP IPO Details
GoAir, founded in 2004 and owned by the Wadia group, commenced its operations in 2005 and has since carried 80 million passengers. The airline serves 28 domestic destinations and 9 international destinations as of January 31, 2020, operating around 300 flights daily. It is ranked as the 5th largest airline in India based on a 2017 survey. GoAir primarily targets young professionals, leisure travelers, and MSME business travelers. The company aims to maximize profits by maintaining a low cost base and optimizing the utilization of its fuel-efficient modern fleet.
Recently, Jeh Wadia, the Managing Director and promoter of GoAir, resigned, and Ben Baldanza, the former CEO of Spirit Airlines, has been appointed as GoAir’s Vice Chairman. Although the company has been considering going public for a few years, internal management conflicts have caused delays. The Wadia group holds a 73.3% stake in the company, while Baymanco Investment Ltd owns a 21.50% stake.
Objects of the Issue
The objectives of the IPO are as follows:
- Prepayment and repayment of the company’s accumulated debt.
- Repayment of dues to Indian Oil Corporation for supplied fuel.
- Funding aircraft upkeep and maintenance, amounting to Rs. 254.93 crore. As of November 2, 2021, the company owes Rs. 1,346.7 million to vendors. It plans to utilize Rs. 96.3 crore from the IPO proceeds to repay these vendors.
IPO Synopsis
GoAir, now rebranded as Go First, has filed an addendum to its Draft Red Herring Prospectus (DRHP) on November 10. The initial DRHP was submitted to the Securities and Exchange Board of India (SEBI) on May 14, 2021, and received SEBI’s approval on August 31, 2021. The IPO will open for subscription on December 8, with anchor investments taking place a day prior, on December 7. The company aims to raise Rs. 3,600 crore through this IPO, which will consist of a fresh issue of shares and no offer for sale (OFS). The book running lead managers for the IPO, as mentioned in the DRHP, are ICICI Securities Ltd, Morgan Stanley India Private Ltd, and Citigroup Global Markets India Pvt Ltd.
Financial Status of Go Airlines India Limited
Go Airlines India Ltd (GoAir), now rebranded as Go First, reported a revenue from operations of Rs. 7,051.6 crore for the fiscal year ended March 31, 2020, representing a 21.8% increase compared to Rs. 5,788.7 crore in the previous year. However, the company has experienced continuous losses from 2016 to 2020. As of April 19, 2021, the total debt of the company stood at Rs. 2,955.9 crore, according to the Draft Red Herring Prospectus (DRHP).
In the September 2021 quarter, Go First witnessed a significant growth in revenue, with a 56.3% increase amounting to Rs. 752.86 crore. The first half of FY22 also showed improved revenue of Rs. 1,202 crore, driven by better capacity utilization. Assuming the company maintains its current market share, it is expected to further increase its top-line revenues in the future.
PARTICULARS (In Rs. crore) | FY20 | FY19 | FY18 |
Revenue from operations | 7,051.6 | 5,788.7 | 4,477 |
PAT | (1,270.7) | (386.6) | (31.21) |
PARTICULARS (In Rs. crore) | FY20 | FY19 | FY18 |
Total Assets | 1,40,82 | 1,11,34 | 7,553.5 |
Share Capital | 157.5 | 150 | 150 |
Key Points about the Go First IPO
Strengths of investing in the IPO:
- Go First has one of the youngest fleets of aircraft in India and globally, with an average age of 3.7 years as of February 2021.
- The company has witnessed an increase in market share, growing from 8.8% in FY17-18 to 10.8% in FY19-20.
- Passenger volume has shown significant growth, with a 22.4% increase to 16.2 million in FY20, and passenger revenue has risen by 24.8%.
- Go First is set to receive an order of 99 A320 NEO aircraft over the next few years.
Risks of investing in the IPO:
- The COVID-19 pandemic has impacted the aviation industry, resulting in decreased departures and increased fixed costs, leading to a rise in debt for Go First.
- The company experienced a net loss of Rs. 470.69 crores between April 2020 and December 2020.
- The entire fleet of Go First comprises Airbus A320 aircraft, which poses a risk in case of engine issues that could affect the entire fleet.
- The company has faced challenges in maintaining high profit margins.
Go Airlines India Limited IPO FAQ’s
What is Go Airlines (India) Limited’s Initial Public Offering?
The company has filed DRHP with SEBI to raise Rs. 3600 crores. The offer consists only of fresh issues and no offer for sale.
When will allotments for the Go Airlines (India) Limited IPO become available?
Go Airlines (India) Limited IPO will finalize the allotment by NA.
What will the IPO lot size for Go Airlines (India) Limited be?
Each Go Airlines (India) Limited IPO lot has NA shares.
When will Go Airlines (India) Limited IPO be available to buy?
The IPO of Go Airlines (India) Limited will be open for subscription from NA.
What is Go Airlines (India) Limited’s smallest lot size available to retail investors?
The minimum market lot size for the Go Airlines (India) Limited IPO is NA shares.
Which exchanges will Go Airlines (India) Limited list on?
Go Airlines (India) Limited shares will be listed on both BSE as well as the National Stock Exchange (NSE).
What is the IPO size of Go Airlines (India) Limited?
The IPO size of Go Airlines (India) Limited is Rs NA crore.
How to check the allotment status of Go Airlines (India) Limited IPO on the Angel One App?
To check your IPO allotment status on the Angel One app, follow these steps:
Login to the Angel One app.
Look for “Investment Opportunities” and choose “IPOs & FPOs”.
Click on “Order Book” to view the allotment status.
How will I get my Go Airlines (India) Limited stock?
Following allotment, the Go Airlines (India) Limited shares will be credited to your Demat account.
Can I use one PAN to submit multiple applications for the public issue of Go Airlines (India) Limited?
No, you cannot use the same PAN to make multiple applications for this Go Airlines (India) Limited IPO or any other public offering.
Is it necessary to give immediate approval to a UPI mandate request?
Yes, it is preferable to give immediate approval to a UPI mandate request. Accepting it as soon as you receive it is recommended.
Who is the CEO of Go Airlines (India) Limited?
Kaushik Khona is the CEO of Go Airlines (India) Limited.