Wadia Group-controlled GoAir Planning its IPO This Year, May Raise Upto Rs 2,074 crore

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GoAir needs to raise money as it has ordered 144 Airbus A320 Neos which are more fuel-efficient than its current fleet, a second source said.

Low-cost airline GoAir, promoted by the Wadia Group, has revived its plans for an initial public offering (IPO) of its shares, six independent sources with knowledge of the matter told Moneycontrol. The airline has already started discussions with investment banks like Citi and Morgan Stanley as well as law firms.

“GoAir is back in the market and is in talks with investment banks like Citi and Morgan Stanley as well as law firms and will soon finalise its advisors. It is keen on an initial public offer as part of which it plans to raise between Rs 1,728-2,074 crore, though a final call has not been taken on the issue size as the discussions are at a preliminary stage,” said one of the sources.

GoAir needs to raise money as it has ordered 144 Airbus A320 Neos which are more fuel-efficient than its current fleet, a second source said. Also, with IndiGo and SpiceJet enjoying high valuations after the grounding of Jet Airways, the GoAir management feels it can get the same multiple, the source added.

“In terms of timing, as of now, based on the pace of discussions and documentation, the earliest the issue can be launched is December or during the January to March time-frame,” a third source told Moneycontrol.

GoAir, with a market share of 11.1%, is the fourth largest airline in India, according to the data released by the Directorate General of Civil Aviation for May 2019. IndiGo is an undisputed leader with a market share of 49%, followed by SpiceJet with 14.8% market share and Air India with 13.5% share. GoAir, however, leads the airlines' pack in terms of on-time performance, followed by Air Asia and IndiGo.

Go Airlines’ total revenue from operations rose to Rs 4,553.35 crore in FY18 from Rs 3,524.88 crore in FY17, while net profit rose 43.66% to Rs 294.88 crore. The airline started international flights in October 2018 and reportedly operates around 1,600 weekly flights across a network of 24 domestic and four international destinations.

Current market leader IndiGo’s IPO in October 2015 was the last public offering in the Indian aviation sector. Notably, the company’s share price has doubled since then.