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Bloomberg
Go Airlines India has got the green light from the nation’s market regulator to raise 36 billion rupees ($485 million) through an initial public offering, according to a person familiar with the matter.
GoAir’s share sale was put on hold in June by the Securities and Exchange Board of India (Sebi). The airline now expects to file a preliminary prospectus in about three weeks, the person said, asking not to be identified because the information isn’t public. Local media reported the approval from Sebi.
A GoAir spokesman and representative from Sebi didn’t immediately respond to requests for comment.
A share sale would come at an opportune time for debt-laden GoAir, which is losing money and plans to rely on proceeds from the IPO to repay debt and dues to creditors including Indian Oil Corp. The carrier, in the process of rebranding itself as GoFirst, has obligations that totaled around 81.6 billion rupees as of mid-April, according to its draft preliminary prospectus.
While Sebi hadn’t specified its reason for delaying the IPO in June, the person familiar said it was paused because of an ongoing investigation that began in 2019 into a company called Bombay Dyeing & Manufacturing Co, which is owned by GoAir’s parent Wadia Group.
Sebi was investigating Bombay Dyeing over certain financial disclosures, BloombergQuint reported in June.
Mumbai-based GoAir has long marketed itself as a budget airline, but its expenses are higher than competitors including InterGlobe Aviation Ltd, known as IndiGo, and SpiceJet Ltd, an analysis by Bangalore-based wealth manager Capitalmind in May showed.
Regardless, GoAir is trying to reposition itself as an ultra-low cost carrier to become more competitive in the country’s cutthroat air travel market.
One way to do that will be by unbundling baggage charges from air tickets, the person said. India’s Directorate General of Civil Aviation in February ruled that carriers can start offering zero baggage and no check-in baggage fares.