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Home / Markets / Ipo /  Go Airlines India files DRHP to raise 3,600 cr via IPO

Go Airlines India Ltd has filed a draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi) to raise 3,600 crore via an initial public offering (IPO).

The company said it is in consultation with its lead managers to issue shares through a preferential issue or any other method to raise up to 1,500 crore.

ICICI Securities, Citigroup Global Markets India and Morgan Stanley are the lead managers on the issue.

Proceeds from the issue will be used to repay all, or a portion of, certain outstanding borrowings up to 2,015.81 crore. 279.26 crore will be used for replacement of letters of credit which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft with cash deposit.

As of December 2020, the company's total borrowings including current maturities and vehicle loans were at 2,036.21 crore, and cash equivalents were at 11.64 crore.

"The reduction of our overall debt will reduce interest costs and improve our lease rate factors. We expect our financial position to be improved by this reduction in debt coupled with our cost management and reduction measure and the anticipated growth in our business. We will continue to focus on strengthening and improving our overall capital structure to allow us to invest in the growth of our business by adding more aircraft as well as expanding our network", the company said in its DRHP.

The company will use 254.93 crore for repayment of dues to Indian Oil Corporation in part or full for fuel supplied.

For fiscal year 2020, total income for the company stood at 7,258.01 crore versus 5,936.75 crore a year ago. Net loss for the period widened at 1,270.74 crore against 386.60 crore a year ago.

For nine months ending December 2020, the company carried 23.87 million total passengers which includes 1.7 million international and 22.17 million domestic passengers.

As of 10 February 2021, its fleet inventory consisted of 56 aircraft, of which 46 aircraft were A320 NEO models and 10 were A320 CEO models. Of these 10 A320 CEOs, three were in the process of redelivery, which will further enhance the homogenous nature of the company's fleet, it said.

Currently, the company has an order book of 98 A320 NEO aircraft and expects to take delivery of eight additional A320 NEOs, in FY22, 14 in fiscal FY23 and 14 in FY24. The airline expects to take deliveries of the balance aircraft from FY25 onwards. The company said that it has the highest percentage of next generation aircraft in its fleet in India.

Due to covid pandemic, the company saw a sudden and significant decline in its revenues and profitability from late February 2020. As a result, it recorded a net loss of 470.69 crore in the nine months ended 31 December 2020. Further, due to the significant impact of covid-19 on its operations, which has led to net losses during the nine months ended 31 December 2020, a negative net worth amounting to 1,961.50 crore and its current liabilities exceeding the compancurrent assets by 4,362.58 crore.

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