Country’s largest passenger airline IndiGo on Tuesday approached Sebi and filed a draft red herring prospectus. The airline plans to raise an estimated Rs2,500 crore from the public through Initial Public Offer (IPO).InterGlobe Aviation limited, which runs the country’s biggest airline by market share under ‘IndiGo’ brand, has offered to issue fresh shares worth Rs1,272 crore, an equivalent amount can be raised through sale of up to 3.01 crore shares by its existing shareholders.
The company said it has filed a Draft Red Herring Prospectus (DRHP) with the Securities Exchange Board of India (Sebi) for its proposed IPO, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations.“The issue will consist of a fresh issue aggregating up to Rs12,722 million and an offer for sale of up to 30,146,000 equity shares by certain selling shareholders of the company.
“The equity shares offered through the issue are proposed to be listed on the BSE and the National Stock Exchange,” it added.The global coordinator and book running lead managers of the issue are Citigroup Global Markets India, JP Morgan India and Morgan Stanley India Company Private limited.
The Book Running lead Managers to the issue are Barclays Bank, Kotak Mahindra Capital Company and UBS Securities India. IndiGo is one of the two profit-making domestic airlines. The already listed airlines in the country include Jet Airways and Spicejet, while trading in long-grounded Kingfisher Airlines is suspended for a long time due to penal reasons.
The carrier would be joining a raft of companies that are gearing up to tap the IPO route for raising funds amid stabilising market trends.IndiGo flew 27.69 lakh passengers in May, accounting for more than a third of the total traffic.last month, all Indian carriers together ferried a total of 71.27 lakh passengers.The only other profitable airline in the country is GoAir.Earlier this month, Sydney-based aviation think-tank ‘Centre for Asia Pacific Aviation’ (CAPA) said IndiGo is estimated to have recorded a profit of $150-175 million in fiscal 2015.The low-cost model using a single type of narrow-body planes is one of the contributing factors for IndiGo’s profitability.
IndiGo was founded in 2006 by travel entrepreneur Rahul Bhatia and US Airways former chief executive Rakesh Gangwal. In the nine months ended December 2014, IndiGo posted a profit of Rs720.84 crore on revenues of Rs10,359.79 crore.
“We believe that we have a strong balance sheet which we believe provides us with a number of competitive advantages, such as lower finance costs and better financial terms from aircraft lessors and suppliers of aircraft components,” IndiGo said in its Draft Red Herring Prospectus (DRHP) filed on Tuesday.