GoAir, the low-cost carrier belonging to the Wadia group, is planning to come out with an initial public offering (IPO) in the next financial year after the company gets more information on the delivery of 72 Airbus A320 neos.
The no-frills carrier could look at raising about $150 million to $175 million (roughly Rs 1000 crore to Rs 1200 crore) through the IPO, PTI reported, citing sources, on 8 February. The report added that the timing about when to enter the capital market would depend on market conditions and expansion of GoAir's current fleet of 19 A320s.
GoAir was likely to get delivery of the 72 aircraft starting from April this year. However, Airbus recently indicated that on account of some "industrial reasons" there could be a potential delay in the delivery of the aircraft.
The Wadia group airline, which commenced operations in 2005, currently operates 144 daily flights across 22 domestic destinations in India and is opposed to modifying the existing 5/20 rule for aviation companies to fly international routes.
The rule stipulates that a domestic carrier can fly overseas only if it has a minimum of five years of operational experience and a fleet of minimum 20 aircraft.
Though stock markets are currently volatile because of a range of global factors like tumbling crude and commodity prices that have impacted many oil-producing countries, aviation companies have been big beneficiaries as aviation turbine fuel (ATF) prices have fallen drastically, leading to huge savings in operating costs. ATF accounts for about 35 percent of the total operating costs of airlines.
The savings arising out of falling ATF prices have reflected in the December quarter results of SpiceJet and Jet Airways, which posted huge rise in net profit.
Jet Airways reported standalone net profit of Rs 467.11 crore in December quarter as against Rs 63.11 crore in the corresponding period last fiscal. A seven percent increase in revenues and a 27 percent reduction in fuel costs enabled the company to post record profit.
SpiceJet's Q3 net profit was up at Rs 238.40 crore as against a loss of Rs 275 crore registered in the corresponding quarter last fiscal. A 35% decline in fuel costs due to lower ATF prices enabled the company to stage a turnaround.
Interglobe Aviation, which owns IndiGo, had raised Rs 3,008 crore at a price of Rs 765 per share in November last year.
The SpiceJet stock closed at Rs 77.55, down 1.65 percent, while Jet Airways was up 3.97 percent and settled at Rs 593.50. Interglobe Aviation lost 1.76 percent and ended at Rs 822.50.