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Capital market regulator SEBI has put has put on hold its approval for the proposed initial public offers of Aditya Birla Sun Life Asset Management Company, and GoFirst (erstwhile GoAirlines) without citing any reason.
The SEBI decision is expected to delay the IPOs that are critical to both companies but especially for GoFirst. The airlines need to raise funds to meet its debt repayment obligations as the aviation sector has been hit severely impacted by the Covid pandemic.
The Wadia-owned airline had sought to raise ₹3,600 crore in May. According to SEBI’s update on its website under the ‘processing status’ section, it had sought certain clarifications from ICICI Securities, the pre-issue coordinating lead manager on June 11.
To BusinessLine ’s query, a GoFirst spokesperson said it “has received no communication from SEBI.” However, company sources said SEBI had sought a few clarifications and the company has responded.
Many clearances
A spokesperson for Aditya Birla Sun Life AMC said given the diversified nature of the financial services businesses, various regulatory clearances are required unrelated to the AMC entity. “This process is taking longer than expected and we are working with SEBI on the next steps of the IPO process,” he added.
According to market sources SEBI puts clearance of an IPO in abeyance if investigation is pending against the company being listed, or any of its group companies.
The IPO approval has been put on hold for 30 days since SEBI has issued a show-cause notice to a subsidiary of Aditya Birla Capital, the holding firm, sources said.
The issuance is largely an Offer For Sale, with Canadian partner Sun Life offering 12.5 per cent and Aditya Birla Capital one per cent.
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