Go Airlines, earlier known as Go Air, is planning to raise money through Initial Public Offerings. The company has filed DRHP with SEBI to raise Rs. 3600 crores. The offer consists only of fresh issues and no offer for sale.
Go Airlines is one of the fastest-growing airlines in India. They are an ultra-low-cost carrier (ULCC) that focuses on maintaining low unit costs. The company’s main target customer consists of young Indians and MSME.
The airlines have flexible and dynamic routes that allow them to increase or decrease the number of flights depending on the demands of the markets. With the increase in demand in the domestic market, the airlines have increased their routes between Tier 2 and Tier 1 cities, and also to various leisure destinations in India.
They currently have an order book of 98 A320 NEO aircraft. They expected to take delivery of additional 8 A320 NEOs in FY2022, 14 in FY2023 and 154 in FY2024.
Go Airlines IPO Objectives:
- A part of the fund will be used in repayment of dues to Indian Oil Corporation Limited
- The funds will be used for repayment of debts availed by the company
Why should you invest in Go Airlines IPO?
- India is one of the fastest-growing large aviation markets in the world. India has improved its ranking from 6th position in 2016 to the third position in 2019, behind US and China.
- Though In 2020 the aviation industry faced a challenge due to the pandemic, steadily it has recovered. The domestic passenger traffic had rebounded to 64.1% of 12 months earlier. The international traffic is still continuing to recover, reaching 26.4%of pre-Covid level in Feb 2021.
IPO Financials
| Particulars | Fiscal 2020 | Fiscal 2019 |
|---|---|---|
| Total Equity | 14,907.0 | 14,907.0 |
| Less: reserve on revaluation on land | - | - |
| Net worth as per regulation 2(1)(hh) of SEBI ICDR Regulation | 14,907.0 | 14,907.0 |
| Profit attributable to the owners of the company | 12,707.4 | 3,866.0 |
| Weighted average no.of Equity Shares outstanding during the period/year | ||
| - For basic earnings per Equity Share | 15,40,71,761 | 15,17,96,657 |
| - For diluted earnings per Equity Share | 15,40,71,761 | 15,17,96,657 |
| Restated basic earnings per share (in ₹) | 82.48 | 25.47 |
| Restated diluted earnings per share (in ₹) | 82.48 | 25.47 |
| Return on net worth (%) | N/A | N/A |
| Net assets value per Equity Share of face value ₹10 (in ₹) | 94.6 | 67.5 |
| EBITDAR | 4,080.3 | 9,494.2 |
| EBIDTAR Margin (%) | 5.6% | 1.60% |
| EBITDA$ | 3,392.0 | 9,419.7 |
Know before investing
Strengths
3With their age being 3.7 years, Go Airlines is one of the youngest fleets in India and globally.
The brand has the highest operational efficiency. They have the third-highest aircraft utilisation of 12.9 hours/day in India.
Go Airlines’ market share has increased from 5.4% in fiscal 2010 to 10.8% in fiscal 2020.
Risks
3Any increase in the fuel price can have an adverse effect on the business and the operations of the company.
Any pandemic like Covid-19 that can disrupt the operations and hence affect the finance of the company.
Any unsuccessful attempts in implementation of any growth strategy can affect the business directly.
