Go First gets SBI approval for IPO of Rs 3,600 crore

August 27, 2021 - Source

SEBI had previously kept IPO on hold in June 2021 due to some pending enquiry against the Wadia Group that owns 73.33% of the Company.

Key points to note –

  • The Company can now go ahead and file the final prospectus.
  • Roadshows can happen to gauge investor interest. The Company aims to raise Rs 1,500 crore through pre IPO placement.
  • Financials of the Company are nothing to rave about. It had a net debt of Rs 7,346 crore and a negative net worth of Rs 1,961 core as on December 31, 2021.
  • Covid has significantly impacted every airline business globally. However, the same is expected to pick up significantly as economies open up both due to return to normalcy as well as revenge traveling.

How and when Go First’s IPO happen, would be an interesting development to watch for airline business in general and Wadia group in particular.

The Go First issue can have implications for other listed entities in the group including Britannia, Bombay Burmah (BBTC), Bombay Dyeing and National Peroxide.

Reason – other entities of the group always get a cautious view if there is a bleeding business in the group that needs to be supported continuously. As of now, Go First being privately owned by the Wadia family has that impact on the other group entities.

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