Air Asia India Unit Mulls IPO; May Need to Post Profits before it Does That | CORPORATE ETHOS

Air Asia India Unit Mulls IPO; May Need to Post Profits before it Does That

By: | January 10, 2018
Air Asia

Jan 10: Air Asia, the Malaysia based airline company’s India unit is said to be weighing options to float an initial public offering. Air Asia chief executive Tony Fernandes has been quoted by web news reports as saying that the airline would knock at the director board door in a bid to avail of approval to go scouting for a banker so that the initial process for the IPO can be kicked off.

Going by market regulator Securities and Exchange Board of India’s (Sebi) public listing guidelines, a company can look at the IPO route only if registers average pre-tax profit of Rs 150 million for at least three fiscals. However, AirAsia India is a company that has been in the red.

A BS report in this regard noted that for the previous financial year, Air Asia had posted net loss of Rs 1.4 billion. This was in fact 23 percent less than the Rs 1.82 billion reported for fiscal 2016. Revenues however were up around 45 percent to Rs 9.52 billion.

Ever since Air Asia started flying in June 2014, it had been in losses terrain. As at March end, Air Asia had accumulated losses of Rs 4.85 billion. The airline in India is a joint venture between Malaysia’s Air Asia Berhad and Tata Sons.

It needs to be expected that Air Asia would be eyeing to consolidate operations and post profits first. Only then will it look towards an IPO, says the report that quoted industry sources. Though the airline believes it can clock profit numbers by fiscal 2019, it remain to be seen what all measures it would bank on to make that happen.