IndiGo owner files IPO to raise $400 million

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The owner of India’s largest airline, budget carrier IndiGo, is launching an initial public offering to raise more than $400 million to finance expansion into the world’s most competitive domestic air travel markets.

According to the bankers, the listing which is planned for the local stock exchanges, would assess InterGlobe Aviation at around $4 billion and would be the biggest IPO in India since Bharti Infratel Ltd (BHRI.NS) listed in December 2012.

According to a draft prospectus submitted on Tuesday, InterGlobe Aviation said it would trade new shares worth 12.7 billion rupees ($200 million) and additional 30.15 million existing shares.

Harsh Vardhan, Chairman of Delhi-based Starair Consulting said, “IndiGo are continuing with their growth plans while others have been cutting their operations. They had to come to the market because they need money for their expansion.”

IndiGo, which runs a fleet of 96 planes, is India’s largest airline according to market share and one of a few that have registered a profit for the last year at least, facilitated by cost cuts and aggressive pricing.

The airline majors in the sale-and-leaseback model, but denies that the model is the main driver of its profits. Parent InterGlobe said it would use the IPO profits to pay off the lease of current aircraft, which would let it bring in more planes.

The managers for the InterGlobe share sale are Citigroup, JPMorgan, Barclays, Morgan Stanley, UBS and Kotak Mahindra.

 

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Asmaa Mubita is a Kenyan journalist of international repute with over fifteen years of experience in broadcast journalism. Asmaa Mubita began his journalism career at the Kenyan state broadcaster (KBC) and later worked at the KTN owned by the Standard Group and Citizen Television, the flagship brand of Royal Media Services. These exploits together with his reporting experience with the Voice of America, CNN and BBC have been rewarded with local and global recognition.