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Go Airlines, India’s fourth largest airlines in India is to come up with an IPO to raise funds. The issue size of the IPO will be around Rs 3,600 crore. Face value of each share will be around Rs 10. The equities of this company are listing at BSE and NSE both.

About Company

Go Airlines operates in an ultra-low-cost carrier (“ULCC”) focused on maintaining low unit costs and delivering compelling value to customers that drives company's unit revenues. Go Air is one of the fastest growing airlines in India, with an increase in domestic market share from 8.8% in fiscal year 2018 to 10.8% in fiscal year 2020. As of February 10, 2021, company's fleet inventory consisted of 56 aircrafts.

Industry Overview

In recent years, India has been the fastest-growing large aviation market in the world. Among the world’s ten largest aviation markets, India had been the fastest growing over the previous four years, posting a CAGR of 12.1%. As result it had improved its ranking from sixth position in 2015 to become the third largest market in absolute terms in 2019, behind the USA and China.

The number of domestic airline passengers in India in Fiscal Year 2020 (13.72 crore) was just over double the number of international passengers (6.65 crore).

The expenditure of Indian travelers is expected to grow to USD 136 billion (Rs 9.5 lakh crore) by 2021.

Financials of the Company

Go Airline is a loss making company.

  Amount is in INR Crore

Strengths of the company-

• Go Airlines works on ULCC (Ultra low cost carrier). Aviation industry works on three carriers which are Full service carriers, Low cost carriers, and Ultra low cost carrier. Among of these three carriers of Aviation Industry, ULCC has highest traffic, and market share.
• Go airlines is one of the fastest growing airlines in India, with an increase in domestic market share from 8.8% in fiscal 2018 to 10.8% in fiscal 2020.

• Government schemes helping aviation industry to grow in a much pace, UDAN scheme which is launched by Government easing the access of common people to travel through air.
• Strong focus on operational efficiency and reliability, in Fiscal year 2020 company had the third highest aircraft utilization of 12.9 hours per day in India.
• Highly experienced Board and management team compliant with corporate governance and backed by the Wadia group.
• Go Airlines had the total passenger volume for FY 2018, FY 2019, and FY 2020 was 1.08 crore, 1.27 crore, and 1.6 crore respectively.
• Established track record of growth across key performance indicators. Go Air’s passenger revenue has grown at a CAGR of 24.8 % from fiscal 2018 to fiscal 2020 and our Operating Revenue has grown at a CAGR of 25.2% in the same fiscal.

Risk Factors-

• Go Air is a loss making company and their losses are not declining over yet.
• Company works in highly competitive industry where singularly Indigo Airline dominates by holding around 50% market share of aviation industry in India.
• Company to utilize the raised proceeds for the repayment of Debt and borrowings.
• Company’s business may adversely affect if company unable to obtain regulatory approvals in the future or maintain or renew our existing regulatory approvals.
• Company is having huge borrowings of Rs 2,955.91 crore.
• Company has been and continues to be in payment default under several of its aircraft lease agreements.

Competitors and Peers-

Company is having 2 listed peers- Spice Jet and Indigo

Objective

• Rs 2015.81 crore to utilize for prepayment or scheduled repayment of certain outstanding borrowings availed by the company.
• Rs 279.26 crore to utilize for replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircrafts, with cash deposit.
• Rs 254.93 crore to use for the repayments of dues to IOCL (Indian Oil Corporation Limited) for the fuel they have supplied to the company.
• Few proceeds will utilize of general corporate purposes.