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    Go Airlines puts IPO plan on hold as COVID-19 cases swell again: Report

    Go Airlines puts IPO plan on hold as COVID-19 cases swell again: Report

    Go Airlines puts IPO plan on hold as COVID-19 cases swell again: Report
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    By CNBCTV18.com  IST (Published)

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    The Nusli-Wadia backed airline -- Go Airlines (Go Air) -- has put its Rs 3,600-crore IPO on hold in view of the adverse impact on travel business due to the Omicron variant of COVID-19. It will also settle some of the issues within.

    Go Airlines has put its Rs 3,600-crore initial public offering (IPO) on hold in view of the resurgence of COVID-19 infections in the country.

    The company has been discussing the plan with its bankers who have advised the group to wait for now, an official close to the group told The Economic Times.

    The Nusli Wadia-backed airline, which was all set for public listing, has put off plans for the time being to settle some of the issues within, the official said. "Also, with the latest wave of COVID, people travel only for essential things, which will further dampen demand for an airline company IPO."

    Go Airlines, which operates the Go First brand, had initially planned to launch the share sale on December 8, Business Standard had reported. Market regulator SEBI had approved the IPO in August after it filed the papers in May last year. Apart from raising Rs 3,600 crore from the IPO, Go Airlines plans to raise an additional Rs 1,500 crore through a pre-IPO placement. The airlines had planned to use the proceeds to retire debt and pay oil companies and lessors.

    The aviation industry was witnessing a recovery in passenger load on a monthly basis, driven by a faster pace of vaccinations and relaxation of travel restrictions. However, the recent spike in COVID-19 cases led by the Omicron variant has again impacted travel.

    At present, top investors are weighing the impact of Omicron on consumers’ travel plans before pumping capital into the aviation sector, ET quoted sources as saying.

    The group has, therefore, put its fund-raising plans on hold and is likely to infuse additional capital into the budget airline to meet operational expenses, the sources said.

    The Wadia Group refrained from commenting on the IPO delay.

    Meanwhile, experts said that the airline will not put the IPO plans in abeyance for long. Although states have imposed restrictions impacting travel business, “everyone is hopeful that there is no long-term impact (of the Omicron) on business,” a fund manager told ET, adding that the aviation sector is bullish in the medium to long term.

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