GoAir mulls IPO this financial year

The carrier would be second domestic airline to come out with an IPO after rival IndiGo

Wadia Group-promoted budget carrier GoAir is planning an initial public offer (IPO) this financial year, ahead of the scheduled delivery of 72 new Airbus  A-320 planes starting April next year.

GoAir would be the second domestic carrier to come out with an IPO. Rival IndiGo, is set a Rs 3,200-crore initial share sale on October 27.

As of now, only two private domestic carriers, Jet Airways and SpiceJet, of the four are listed ones.

The airline is likely to file the preliminary papers for the share sale soon, sources added.

However, the likely size of the planned IPO could not be ascertained. When contacted, a GoAir official said, "We don't comment on market speculations".

GoAir and IndiGo are the only two profitable domestic carriers.

Sources said the share sale would  help GoAir in its proposed international operations, on hold as it does not have 20 aircraft in the fleet, one of the two requisites for domestic carriers fly abroad.

The airline, however, deferred the plan in view of the commencement of the delivery of new Airbus A320 neo (new engine option) from April, 2016. GoAir had in June, 2011 placed order for these 72 new A320s, valued at about Rs 32,400 crore, with the European aviation major Airbus.

The existing rules require domestic carriers to be in operation for at least five years and have a fleet of a minimum of 20 aircraft to be eligible to fly on international routes. The rules are, however, under review as part of the much-awaited new civil aviation policy.

In signs of revival in the primary market, many companies are coming out with IPOs. Cafe Coffee Day Enterprises’ Rs 1,150-crore share sale is the largest IPO in nearly three years.

IndiGo’s Rs  3,268-crore IPO opens on October 27 and closes on October 29. Though the carrier's share sale is much awaited, the expectations are slightly tempered after the relatively lukewarm response to Cafe Coffee Day issue. Under IndiGo's offer, its parent InterGlobe Aviation would have fresh issue worth Rs  1,272.2 crore as well as an offer for sale of over 2.61 crore shares.