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The struggles of Go Airlines India Ltd., the parent of low-cost carrier Go First, to go public since 2015 underscores pitfalls for Indian airlines as they can’t rely on Indian bourses to raise funds amid mounting losses.
After multiple attempts to launch an initial public offering in the last seven years, this time the company’s draft red herring prospectus expired in August. Multiple challenges including Ukraine-Russia war, Omicron variant of coronavirus and volatility on the stock exchanges forced the company to push back the IPO several times.
“Capital requirements for businesses will go up eventually, which is why going public is a compulsion and not an option,” said Deven Choksey, founder and promoter of KRChoksey Holdings. “Not many promoters have the financial heft needed to keep an airline going.”
The Wadia group-controlled Go First sought to raise Rs 3,600 crore in the initial public offering to pay back debt, repay lessors and expand its network both in domestic and international markets.
Now, the company will evaluate the right time to file DRHP again and wait for the market to stabilise, a company spokesperson said over the phone.
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Image and article originally from www.bqprime.com. Read the original article here.