Due to the third wave of COVID-19 and its influence on India’s aviation business, the Nusli Wadia Group has decided to put on hold a 3,600-crore Initial Public Offering (IPO) plan for its budget airline Go First.
The corporation is closely assessing the pandemic situation caused by the Omicron variant and is in talks with its bankers about an initial public offering (IPO). The top investors are examining the impact of the Omicron spread on consumer health and travel plans before investing in the aviation business, reported Economic Times.
Go First filed for an initial public offering in May 2021 and gained approval from market regulator SEBI in August. It planned to raise additional Rs 1,500 crore through a pre-IPO placement in addition to the Rs 3,600-crore public offering.
However, all fundraising plans have been put on hold for the time being, and the group is anticipated to inject further capital into Go Airlines, which is in desperate need of cash, ET quoted an anonymous source. The bankers are asked to wait.
Wadia Group is yet to comment on the development.
According to several market experts, the airlines IPO should be released sooner rather than later because of the impact of Omicron, considering that it is a milder variant and may not endure for long.
The IPO for Go Airlines was supposed to happen on December 8.
The family dispute could be a reason for Go Airlines IPO delay, rumours say
Meanwhile, there are also reports arising that there is a family dispute within Wadia Group that is causing the delay. Jeh Wadia, the son of Wadia Group chairman Nusli Wadia, had resigned from the boards of all of the group’s companies mid last year, including from Go Airlines and the company’s flagship company Britannia Industries. However, Wadia Group claims that it is an attempt to hand over the operations to non-family professionals. Currently, Varun Berry runs Britannia.
Jeh Wadia has been Go Air’s Managing Director since its founding in 2004-05. Jeh’s company, Go Holdings, owns the airline’s trademark. Wadia Group rebranded its entire organisation as Go First after he resigned, as it considered legal alternatives for the trademark issue.