Go First is likely to see its long-planned initial public offering (IPO) delayed once again, as a document it released to lure potential new investors is set to expire in the coming days and a launch date for the IPO has yet to be announced.
The IPO had intended to raise INR 36 billion (3600 crores) to reduce debt, repay lessors, and boost operations in India and internationally. It was reported in May that parent Wadia Group was aiming for the airline to go public in early July.
This was after the Securities and Exchange Board of India (SEBI) last summer gave Go Airlines Private Limited the green light for its debut on the Mumbai Stock Exchange. The carrier has been planning a listing since at least 2015 when it was known as GoAir.
A draft red herring prospectus (DRHP) that Go First released to introduce itself to investors will now expire on August 26.
The company has not announced a date for the launch of the IPO as of August 22, the business news publication Mint reported, and it will need to refile its IPO papers with the SEBI if it fails to do so.
A public issue or rights issue needs to be opened within 12 months of the date of issuance of observations, according to SEBI regulations. This period was extended by six months during the pandemic, but no longer.
Go First is one of 27 companies in India that have filed their prospectuses with the board but whose applications will also expire by the end of 2022 unless they kickstart the process.
“We are witnessing a considerable gap in the pace at which DRHPs are being filed versus the rate at which IPOs are being launched. Some DRHPs filed by the companies will expire soon, so they will need to look to refile them,” said an investment banker.
Go First has also grounded more than a fifth of its fleet due to delayed deliveries of aircraft engines by Pratt & Whitney. The airline has grounded about a dozen of its 57 planes for weeks as it awaits delivery of the upgraded versions of the PW1100G geared turbofan engines which power the A320neo aircraft.