Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 3463.02 ACUITE B | Downgraded | Issuer not co-operating* -
Bank Loan Ratings 2136.98 - ACUITE A4 | Downgraded | Issuer not co-operating*
Total Outstanding Quantum (Rs. Cr) 5600.00 - -
 
Rating Rationale
Acuite has downgraded its long term rating from 'ACUITE BBB+' (read as Acuite Triple B plus) to 'ACUITE B' (read as Acuite B) on Rs. 3463.02 Cr. long term bank facilities and further downgraded its short term rating from 'ACUITE A2+' (read as Acuite A two plus) to 'ACUITE A4' (read as Acuite A four) on Rs. 2136.98 Cr. short term bank facilites of Go Airlines India Limited (GoFirst). The rating is now an indicative as 'Issuer Not Cooperating' and based on best  available information.

Rationale for rating
Acuite factors the incessant business challenges faced by the company on operational front due to grounding of 50% of its existing fleet on account of P&W engine issues, this has resulted in higher fixed expenses and thus significant operational challenges. GoFirst has suspended its operation till 15th May 2023 due to cash flow issues. The arrangement with Oil Marketing Companies (OMC) was currently on cash and carry basis and due to shortage of funds the daily operations could not be continued. GoFirst has sustained losses for more than three year in a row and frequently relied on fund infusion by the promoter group for sustenance of business operations. The losses have over the years widened, thereby impacting the liquidity and has consequently defaulted on meeting its lease payments (commercial obligation). Acuite also takes note of the announcement by the company of filing voluntary insolvency and the media releases claiming initiation of proceedings for repossession of aircrafts. Acuite will closely monitor the developments with regards to resolution proceedings and shall accordingly assess the impact of such developments on the financial and business risk profile of the company.

Furthermore, the rating has been migrated to INC (issuer not cooperating) category as the issuer has failed to submit No Default Statement (NDS) for the last three month ended April 30, 2023. Acuite has made attempts to seek information from the issuer with regards to the recent developments but has not received any response.

About the Company
­Go Airlines (India) Limited (Go First) was the aviation foray of the Mumbai based ‘Wadia’ Group. The company was initially incorporated in April, 2004 as a private limited company and was later converted into a Public Limited Company in March, 2011. It launched low fare passenger airline services in Nov 2005 under the brand name 'Go Air'. In April 2021, the company rebranded its services to ‘Go First’. As of Aug, 2022, Go First has a total fleet size of 58 aircraft serving 34 domestic destinations and 9 international destinations with an operational track record of nearly 17 years.
 
About the Group
­Wadia Group is one of the oldest business group in India which was founded in 1736. The Group is a diversified conglomerate with businesses ranging from FMCG, Aviation, Chemicals, and Healthcare to Real Estate. Bombay Dyeing & Manufacturing Company Limited is the flagship company of the Wadia Group, engaged primarily in the business of textiles. Brittania Industries is another large listed entity where the Wadia Group has a significant stake. While four companies are listed on the Indian Stock Exchanges, the above two companies have been listed for over hundred years.
 
Non-cooperation by the issuer/borrower
­Acuité has been requesting for No Default Statements (NDS); however, despite multiple requests; the Company’s management has remained non-cooperative and not submitted the NDS for the preceding 03 consecutive months.

Acuité had also requested for data/clarifications, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit such information before the due date.

Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is therefore being flagged as “Issuer not cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.
 
Limitation regarding information availability
­The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité has endeavoured to gather information about the entity/industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.
 
Rating Sensitivities
­"No information provided by the issuer / available for Acuite to comment upon."
 
Material Covenants
­None
 
Liquidity Position
­"No information provided by the issuer / available for Acuite to comment upon."
 
Outlook : Not Applicable
­
 
Other Factors affecting Rating
On the basis of publicly available information:
  • The company was burning cash to the tune of Rs. 200 Cr. per month and hence faced liquidity crunch as a result of which the company has filed a voluntary insolvency resolution proceeding before NCLT on 3rd May 2023. NCLT has allowed the urgent hearing of the matter. NCLT gave direction to list the case at 10:30 AM on 4th May 2023.
 

Particulars Unit FY 22 (Actual) FY 21 (Actual)
Operating Income Rs. Cr. 4255.88 2171.74
PAT Rs. Cr. (1804.08) (870.16)
PAT Margin (%) (42.39) (40.07)
Total Debt/Tangible Net Worth Times (1.06) (1.08)
PBDIT/Interest Times 0.17 0.26
Status of non-cooperation with previous CRA
­The rating from Brickworks dated January 17, 2023 is flagged as Issuer not cooperating and is under INC flag since July 09, 2020.
 
Any other information
­Acuité is yet to receive the latest No Default Statement (NDS) from the rated entity, despite repeated requests and follow-ups.
 
Applicable Criteria
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Service Sector: https://www.acuite.in/view-rating-criteria-50.htm
Note on Complexity Levels of the Rated Instrument
I­n order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’ s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.
 

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
19 Jan 2023 Term Loan Long Term 31.60 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 1320.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Secured Overdraft Long Term 20.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 25.65 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Secured Overdraft Long Term 100.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Secured Overdraft Long Term 843.02 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Letter of Credit Short Term 30.00 ACUITE A2+ (Downgraded from ACUITE A1)
Term Loan Long Term 5.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Proposed Bank Facility Long Term 650.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 98.22 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 93.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Working Capital Demand Loan Long Term 30.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 64.05 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 73.90 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Proposed Bank Facility Short Term 450.00 ACUITE A2+ (Downgraded from ACUITE A1)
Proposed Bank Facility Long Term 100.00 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Letter of Credit Short Term 1200.00 ACUITE A2+ (Downgraded from ACUITE A1)
Term Loan Long Term 4.80 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Term Loan Long Term 3.78 ACUITE BBB+ | Negative (Downgraded from ACUITE A- | Negative)
Letter of Credit Short Term 456.98 ACUITE A2+ (Downgraded from ACUITE A1)
11 Oct 2022 Term Loan Long Term 31.60 ACUITE A- | Negative (Assigned)
Letter of Credit Short Term 1200.00 ACUITE A1 (Reaffirmed)
Working Capital Demand Loan Long Term 30.00 ACUITE A- | Negative (Reaffirmed)
Letter of Credit Short Term 30.00 ACUITE A1 (Reaffirmed)
Term Loan Long Term 93.00 ACUITE A- | Negative (Assigned)
Term Loan Long Term 73.90 ACUITE A- | Negative (Assigned)
Secured Overdraft Long Term 100.00 ACUITE A- | Negative (Reaffirmed)
Secured Overdraft Long Term 843.02 ACUITE A- | Negative (Reaffirmed)
Term Loan Long Term 3.78 ACUITE A- | Negative (Assigned)
Term Loan Long Term 25.65 ACUITE A- | Negative (Assigned)
Term Loan Long Term 64.05 ACUITE A- | Negative (Assigned)
Term Loan Long Term 1320.00 ACUITE A- | Negative (Assigned)
Term Loan Long Term 5.00 ACUITE A- | Negative (Reaffirmed)
Proposed Bank Facility Short Term 450.00 ACUITE A1 (Assigned)
Proposed Bank Facility Long Term 650.00 ACUITE A- | Negative (Assigned)
Term Loan Long Term 98.22 ACUITE A- | Negative (Assigned)
Proposed Bank Facility Long Term 100.00 ACUITE A- | Negative (Reaffirmed)
Secured Overdraft Long Term 20.00 ACUITE A- | Negative (Reaffirmed)
Letter of Credit Short Term 456.98 ACUITE A1 (Reaffirmed)
Term Loan Long Term 4.80 ACUITE A- | Negative (Assigned)
01 Apr 2022 Letter of Credit Short Term 504.00 ACUITE A1 (Reaffirmed)
Secured Overdraft Long Term 20.00 ACUITE A- | Stable (Assigned)
Cash Credit Long Term 100.00 ACUITE A- (Withdrawn)
Term Loan Long Term 5.00 ACUITE A- | Stable (Reaffirmed)
Proposed Bank Facility Long Term 100.00 ACUITE A- | Stable (Reaffirmed)
Secured Overdraft Long Term 363.50 ACUITE A- | Stable (Reaffirmed)
Letter of Credit Short Term 1200.00 ACUITE A1 (Reaffirmed)
Secured Overdraft Long Term 100.00 ACUITE A- | Stable (Reaffirmed)
Letter of Credit Short Term 30.00 ACUITE A1 (Reaffirmed)
Working Capital Demand Loan Long Term 30.00 ACUITE A- | Stable (Assigned)
Secured Overdraft Long Term 432.50 ACUITE A- | Stable (Reaffirmed)
06 Jan 2021 Term Loan Long Term 5.00 ACUITE A- | Stable (Assigned)
Bank Guarantee Short Term 567.50 ACUITE A1 (Assigned)
Cash Credit Long Term 100.00 ACUITE A- | Stable (Assigned)
Secured Overdraft Long Term 432.50 ACUITE A- | Stable (Assigned)
Secured Overdraft Long Term 100.00 ACUITE A- | Stable (Assigned)
Bank Guarantee Short Term 30.00 ACUITE A1 (Assigned)
Bank Guarantee Short Term 1200.00 ACUITE A1 (Assigned)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating
Central Bank of India Not Applicable Letter of Credit Not Applicable Not Applicable Not Applicable 456.98 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Bank of Baroda Not Applicable Letter of Credit Not Applicable Not Applicable Not Applicable 1200.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Axis Bank Not Applicable Letter of Credit Not Applicable Not Applicable Not Applicable 30.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Long Term Bank Facility Not Applicable Not Applicable Not Applicable 100.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Long Term Bank Facility Not Applicable Not Applicable Not Applicable 650.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Short Term Bank Facility Not Applicable Not Applicable Not Applicable 450.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Bank of Baroda Not Applicable Secured Overdraft Not Applicable Not Applicable Not Applicable 100.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Secured Overdraft Not Applicable Not Applicable Not Applicable 843.02 Simple ACUITE B | Downgraded | Issuer not co-operating*
IDBI Bank Ltd. Not Applicable Secured Overdraft Not Applicable Not Applicable Not Applicable 20.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Term Loan Not available 9.90 Not available 5.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Term Loan Not available Not available Not available 93.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Term Loan Not available Not available Not available 73.90 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Term Loan Not available Not available Not available 64.05 Simple ACUITE B | Downgraded | Issuer not co-operating*
Central Bank of India Not Applicable Term Loan Not available Not available Not available 25.65 Simple ACUITE B | Downgraded | Issuer not co-operating*
IDBI Bank Ltd. Not Applicable Term Loan Not available Not available Not available 4.80 Simple ACUITE B | Downgraded | Issuer not co-operating*
IDBI Bank Ltd. Not Applicable Term Loan Not available Not available Not available 3.78 Simple ACUITE B | Downgraded | Issuer not co-operating*
Deutsche Bank Not Applicable Term Loan Not available Not available Not available 1320.00 Simple ACUITE B | Downgraded | Issuer not co-operating*
Bank of Baroda Not Applicable Term Loan Not available Not available Not available 31.60 Simple ACUITE B | Downgraded | Issuer not co-operating*
Bank of Baroda Not Applicable Term Loan Not available Not available Not available 98.22 Simple ACUITE B | Downgraded | Issuer not co-operating*
IDBI Bank Ltd. Not Applicable Working Capital Demand Loan (WCDL) Not available Not available Not available 30.00 Simple ACUITE B | Downgraded | Issuer not co-operating*

Contacts
Analytical Rating Desk
About Acuité Ratings & Research
Acuité Ratings & Research Limitedwww.acuite.in