The Wadia Group-controlled Go First, previously known as Go Air, has filed for an initial public offering (IPO) to raise Rs 3,600 crore.
The airline has revealed in its draft red herring prospectus (DRHP) document that it also plans to attain Rs 1,500 crore via a preferential placement of shares ahead of the IPO.
Morgan Stanley, Citi and ICICI Securities will be managing the sale of shares, the net proceeds of which will be primarily put into use to repay debt. Go First is looking at the IPO to counter the setback that the civil aviation industry has had to deal with ever since the Covid-19 pandemic broke out.
However, it has already cautioned in its IPO document that the pandemic has adversely influenced its financial condition, operating results and liquidity.
The Indian stock market has shot up by nearly 56 per cent in the last year and the airline hopes to capitalize on the same bullish investor sentiment.
Go First is the third presently operational Indian airline besides IndiGo and Spicejet that is set to go public.
Nripendra Singh, research head and strategy consultant of aviation at Frost & Sullivan, Hindustan Times that investors have confidence in the stock market, which has led to its sharp rise despite the global pandemic.
“IPO is more to do with investor confidence than the underlying condition of the sector. The funding will give GoAir some advantage over rivals when the sector bounces back,” Singh was quoted by the publication.