The airline will have to wait a little more to realize its IPO dream
New Delhi, September 17,2022: Indian budget carrier Go First has missed its deadline for launching its IPO, and now, it has emerged that it has delayed the plans until later this year. The airline received permission for an initial public offering last year and had 12 months to go ahead with its plans. But an underperforming quarter and less-than-optimal recovery forced it to postpone the launch.
Pushed to November
Go First has delayed its IPO plans for the third time and won’t go ahead with it at least until November this year. According to a report by Moneycontrol, the low-cost carrier has cited ‘weak consumer sentiments’ surrounding aviation stock.
“Go First has been advised to wait for the new ATF pricing mechanism to kick in before launching its IPO. The new ATF pricing mechanism is expected to boost sentiment in the aviation sector.”
The airline has sensed that people are not yet ready to invest in aviation stock during a time when the industry is still recovering from the pandemic. Another source added that the carrier had initially hoped for a good domestic and international recovery, but a weak April-June quarter forced it to delay the IPO launch once again. According to the report published in simpleflying.com
Deadline expired
Go First was one of several companies in India that filed their draft red herring prospectus (DRHPs) with the Securities and Exchange Board of India (SEBI) in the last one year.
The rules dictate that a company must launch an IPO within 12 months of approval by the SEBI. During the pandemic, it was extended by six more months, but it is now back to being 12 months.
The airline will now need to refile its IPO papers with SEBI to have another shot at it. It is hoping for the industry to heal significantly by the time it is ready for its next attempt when consumers are hopefully more confident about airline stock
Waiting for better times
Go First had to put its IPO plans on hold twice before this due to the Russia-Ukraine conflict and the IPO of India’s Life Insurance Corporation (LIC). The escalating prices of jet fuel in the last few months have only added to the complexity of the situation, with airlines still coming to terms with a price increase of almost 120% since 2021.
