India is served by the low-cost airline GoAir, which is sometimes known as GO Airlines. The airline has steadily expanded since its establishment in 2005 and now offers both domestic and international travel. GoAir is renowned for its affordable prices, punctual arrivals, and top-notch customer service.
The passage discusses an airline, Go Airlines, facing tough times due to travel restrictions caused by the pandemic. They’re planning a relaunch with a Go Airlines IPO, aiming to use the raised funds to reduce debt and pay off fuel dues to Indian Oil Corporation. The IPO funds will also be used to replace some debt instruments issued with cash deposits for plane lessors.
Reasons Behind the IPO:
The primary purpose behind GO Airlines’ IPO is to raise capital for various initiatives, including:
- Expansion: Funding fleet expansion and acquiring new aircraft.
- Debt Repayment: Settling existing debts to improve financial health.
- Business Diversification: Investing in technology, infrastructure, and customer experience enhancements.
- Market Positioning: Strengthening its competitive position in the aviation sector.
Strength:
- Positioned as a low-cost carrier that prioritizes high utilization rates and cost effectiveness.
- By September 2021, it will have 57 aircraft in its fleet, 82% of which will be fuel-efficient A320 NEOs, which will assist reduce fuel expenditures.
- Possesses an order book for 98 A320 NEO aircraft, which will be delivered in stages until the 2025 fiscal year.
- Keeps the average fleet age of Indian low-cost airlines very low at 3.7 years. obtained prominent locations in airports with limited slots, such as Pune, Ahmedabad, Mumbai, and New Delhi.
- Displays 12.9 hours, the third-highest average daily aircraft use.
Risk:
- Could encounter new difficulties as a result of the flexible nature of travel restrictions linked to pandemics.
- Had trouble making lease payments from February 2020 to March 2021. as of April 19, 2021, possessed a consolidated debt of ₹8,160 crores.
- Strong rivals IndiGo, SpiceJet, and Air India, which could put pressure on prices.
- Operates in a sector of the economy that has historically seen losses because to low profit margins and large fixed costs.
- Market share rose from 8.8% in the 2018 fiscal year to 10.8% in 2020; however, by November 2021, it had somewhat declined to roughly 8.5%.
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Financial:
How to Apply for GO Airlines IPO:
If you want to take advantage of this investing opportunity but are confused how to apply for the GO Airlines IPO, we’ve described the processes for you below:
- Login to your Demate account.
- After successfully logging in, click on ‘IPO’ Section.
- Under the IPO section, look for the ‘GO Airlines IPO’ tab and click on it
- Fill in all the requirements, like ‘bid price’ and ‘lot size’.
- Confirm it and click on the ‘Apply.’
- Accept on your UPI app.
Open a demat account with Zerodha to apply for the GO Airlines IPO:
A demat account is required in order to apply for the GO Airlines initial public offering. Using a demat account, you can hold the shares you buy in a dematerialized fashion. If you don’t already have one, you can open a demat account with Zerodha by going to our website or downloading the app.
Here is a step-by-step guide on how to open a demat account with Zerodha:
- Click here to visit the demat account opening page on the Zerodha website.
- Enter your Mobile number and essential details to open a demat account.
- Upload the scanned copies of your bank statement, Aadhaar card, PAN, and cancelled check.
- Utilizing the OTP that was sent to your registered mobile number, complete the e-verification.