Having previously scheduled an Initial Public Offering (IPO) for December 8, Go First (GOW, Mumbai International) owner Wadia Group has put the planned INR36 billion rupee (USD485 million) flotation for the carrier on hold, sources close to the group have told The Economic Times.

A third wave of Covid-19 currently raging across India is not the right backdrop for such a move, the anonymous sources said, and bankers the company has been working with “have been told to wait.”

Investors awaiting the IPO, which GoAir (Mumbai International) (as the low-cost carrier was known until a rebrand in 2021) had initially planned for the end of 2019, are now watching what impact the Omicron variant will have on travel before committing any investments to the aviation sector.

In the post-Covid world, the carrier filed to go public in May 2021 and received the nod from market regulator the Securities and Exchange Board of India (SEBI) in August. It said at the time that it would use the funds to repay loans, replace letters of credit issued to lessors with cash deposits, pay off debts to the Indian Oil Corporation, and for general corporate use.

With all fundraising plans now on hold, Wadia Group is expected to inject additional capital in the airline so it can meet its daily and monthly operational expenses, the sources said.

But market insiders told the newspaper that given the mild nature of the variant it is unlikely investors will have to wait long for the long-anticipated flotation. They view Omicron as a “modest, near-term risk” for airlines due to delays and cancellations caused by widespread staffing shortages, and expect that ongoing vaccinations in India should offset some of the downside.