India's Go First to receive ₹6bn capital top-up by mid-2Q23

The Wadia Group, owners of Go First (GOW, Mumbai International), will invest a further INR3 billion Indian rupees (USD36.5 million) in the beleaguered airline while searching for a strategic partner to acquire a minority stake, squashing reports earlier this week that it was looking to exit its airline business completely.

"We have no plans to shed our stake or exit the aviation business," a Wadia Group spokesperson told the ANI news agency. "Our promoters are committed to the business and are infusing further funds in the form of equity... We are in talks with potential investors for selling a minority stake."

The spokesperson said Go First was also confident of securing a loan from a consortium of banks for INR3 billion by the end of the month, matching the Wadia Group's capital top up. "This would help us meet our immediate capital requirements. The Wadia family and the bank will provide INR3 billion rupees each," said the spokesperson.

The low cost carrier is facing ongoing operational challenges resulting from aircraft groundings caused by Pratt & Whitney engine supply chain issues, which are beyond the control of Go First. According to the ch-aviation fleets module, 31 of Go First's 59 aircraft are currently inactive. The data reveals 17 of those are withdrawn from service for maintenance reasons while 14 are in storage. In the most recent financial year, Go First recorded its highest ever annual loss of INR18.08 billion (USD220.2 million), and revenues of INR41.84 billion (USD509.6 million), the worst since 2018.

Amid Go First's ongoing financial and operational difficulties, credible reports had recently emerged that the Wadia Group was looking to divest. They have pumped INR30 billion (USD365 million) into the airline since late 2021 and were reportedly reluctant to put additional capital into the business. But the Wadia Group spokesperson says there will be no exit from the airline business and that they will continue to back Go First. "Promoters have consistently supported the airline from inception and provided liquidity from time to time," he said. The new round of funding is expected to be disbursed by the end of April. Go First say they will use the funds to tackle the supply chain disruptions.