IndiGo poised for takeoff on bourses with Rs 2,500cr IPO

Issue to include new shares worth `1,272 cr, and 30.15 mn existing shares for an almost equivalent amount.

Setting the stage for the largest initial public offering (IPO) by an airline, InterGlobe Aviation Ltd, which operates IndiGo, India’s biggest carrier by market share, filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (Sebi).

IndiGo, co-founded by Rahul Bhatia and former US Airways CEO Rakesh Gangwal, plans to raise an estimated Rs 2,000-2,500 crore from the IPO.

InterGlobe Aviation Ltd has offered to issue fresh shares worth Rs 1,272 crore, and an equivalent amount can be raised through sale of up to 30.15 million shares by existing shareholders.

“The issue will consist of a fresh issue aggregating up to Rs 12,722 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 Bombay Stock Exchange and the National Stock Exchange of India,” the airline said in a statement.

Citigroup, JPMorgan Chase and Co, Morgan Stanley, Barclays Plc, Kotak Mahindra Bank Ltd and UBS AG are the bankers in the deal.

At a time when other carriers are bleeding and some have even shut shops, IndiGo, which currently has a fleet of 96 Airbus A320s and domestic market share of 38.9% in May.

Aviation consultancy Capa said in a report estimated that IndiGo posted a record profit of $150-175 million in 2014-2015 — its

seventh-straight in a row. The unlisted GoAir was the only other profitable airline in 2014-15.

Gangwal-led Caelum Invest­ments, owns 48% in IndiGo. IndiGo’s parent company InterGlobe Enterprises owns 51.12% stake while the rest is held by Kapil Bhatia, his son, Rahul, Gangwal’s wife Shobha and sister Asha Mukherjee.

Many foreign airlines are said to have evinced interest in the airline, with Qatar Airways at the forefront. “In travel agency business there have been two crazy success stories – Rahul Bhatia and Naresh Goyal of Jet Airways,” said Rajji Rai, Bhatia’s senior at school and former president at Travel Agents Association of India.

IndiGo said on Tuesday that its order for 250 aircrafts from Airbus had expired, but that the two remained in talks about acquiring a “significant” number of A320neo jets, according to Reuters.