The Securities and Exchange Board of India has given a green signal to Budget carrier Go Airlines, which has rebranded itself as 'Go First', for an initial public offer worth Rs 3,600 crore.

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According to the Draft Red Herring Prospectus (DRHP), the airline is planning to garner up to Rs 3,600 crore through sale of shares. It is also planning to raise up to Rs 1,500 crore by way of a pre-IPO (Initial Public Offer) placement.

 

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It can be noted that the airline had filed its preliminary papers for the IPO in the month of May and had received its observations on August 26, as per SEBI's latest update on processing status of the draft offer documents.

Objective of the IPO:

As per the information, Go First is planning to utilise over Rs 2,015.81 crore out of the total net IPO proceeds towards pre-payment or scheduled repayment of all or a portion of certain outstanding borrowings.

An amount of Rs 279.26 crore would be for "replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircraft, with cash deposit".

Also, the carrier plan to repay dues of Rs 254.93 crore to Indian Oil Corporation for fuel supplied to it, as per the DRHP.

Shareholders of the company:

Majority stake of the airline is with the Wadia Group that is 73.33 percent while the remaining shareholding is with other entities, including Baymanco Investments Ltd with 21.05 percent stake.

Other shareholders include Sea Wind Investment and Trading Company Ltd (3.76 per cent shareholding), Heera Holdings & Leasing Pvt Ltd, Nidhivan Investments & Trading Company Pvt Ltd and Sahara Investments Pvt Ltd -- all the four entities have 0.62 per cent stake each in the airline.

Book Running Managers:

Global coordinators and Book Running Lead Managers to the issue are ICICI Securities, Citi and Morgan Stanley.

Listed Airlines: 

At present, three scheduled carriers are listed on the domestic bourses. They are IndiGo, SpiceJet and Jet Airways. Jet Airways, which shuttered operations in April 2019, is undergoing insolvency resolution process. In June, the National Company Law Tribunal (NCLT) approved a resolution plan for the airline by Jalan Kalrock consortium, as per a report by PTI.