23 December 2010

GoAir Initial Public Offerings (IPO) Stock Price, date, allocation, allotment, subscription, status and prospectus

Budget airline GoAir is planning to raise Rs 4-5 billion via an initial public offer in BSE NSE to repay debt and buy more aircraft, the Economic Times reported on Thursday.
The Mumbai-based airline owned by the Wadia group is in talks with investment banks such as Enam Financials to manage the offer and JM Financial is advising the airline, the paper quoted two sources close to the development as saying.
GoAir plans to raise Rs 4-5 bn via IPO

The airline has 10 Airbus aircraft and plans to expand its fleet to 20 aircraft by 2014.
A spokesperson for GoAir declined comment to the paper and Reuters could not reach the company for a comment immediately.

GoAir IPO: Review Analysis & Details

Some basic details first about the GoAir IPO, which are available as of now:

- The size of GoAir IPO is not exactly known, but as per the reports the size of the GoAir IPO will be around 400-500 Crore Rupees

- The majority of the capital collected through the GoAir IPO will be used to repay debt and to buy some new aircraftst to add to the GoAir fleet GoAir Logo

What are the primary reasons for GoAir to come out with the GoAir IPO?
The main reason for any company to come and list its shares in the stock market is to collect money from common public and so is the case with GoAir IPO
The money collected will be used by the company to repay its debts and to buy additional aircrafts. It is reported that the company is planning to double its no. of aircrafts from existing 10 to 20 airplanes by 2014-2015. In the short term, it is planning to add atleast 3 airplanes by the year 2011

So what is the needs of GoAir to come out with the GoAir IPO?
The aviation industry in India is showing some good growth signs, so the company management is reported to be hopeful about the IPO. However, its the investors who should take the call.
Business Expansion, Repayment of debts and loans are good enough reasons to be quoted for an IPO. However, one must note that an IPO is no guarantee of sure shot returns. Please read our previous article Investing in Airline Companies? for a detailed analysis about airline stocks and their performance.

What is the issue size of the GoAir IPO?
No info about that except that the company plans to raise 400-500 Crore Rupees from the GoAir IPO.
What is the price band of GoAir IPO?
It is reported that the recommended price band for GoAir IPO is not yet decided.

How many shares will be sold in the GoAir IPO?
The total no. of shares to be sold through this IPO is not known precisely.

What are the IPO dates for GoAir IPO
The IPO dates have not yet been finalised. But the IPO is expected to hit the markets sometimes in the next few months. The reason for this is that the airline sector has shown around 25% growth in November 2010. The same is expected to accelerate further and reach around 35-40% growth rate.

How will the capital raised by GoAir IPO be used?
It will be used for business expansion by purchase of new aircrafts and for repayment of debts.

Any ratings given to GoAir IPO?
No information about that as of now.

What are the analysts recommendations and business results for GoAir IPO?
No details available as of now. But one must be cautions about airline stocks. The reason is that historically, majority of the airline companies have posted not good returns - airline is not among the best performine sector in the stock markets.
Moreover, the aviation sector is strictly controlled by the government & regulations. In countries like India, we have recently seen new regulations about airlines should post their maximum fares on their websites in advance. All this is good for common passengers, but might be bad for investors of airline companies.
However, the IPO is a different story. One may make good returns in the short term, say by applying for IPO and selling it for profits on the listing date. Investors to take the call in the random markets
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