InterGlobe Aviation, the company that runs low-cost carrier Indigo Airlines, aims to raise Rs 3,100-3,269 crore through a three-day initial public offering (IPO) that opens on October 27. The company on Monday officially announced the price band at Rs 700-765 per share.
InterGlobe Aviation’s IPO consists of a fresh issue of Rs 1,272.2 crore, and an offer for sale (OFS) by promoters and existing shareholders to the tune of Rs 1,997 crore. Existing shareholders will sell a little more than 2.61 crore shares. The company will use part of the fresh proceeds to repay debt worth Rs 1,166 crore, Aditya Ghosh, president and ED, InterGlobe Aviation, said in a media presentation.
The primary market deal values the company close to Rs 26,500 crore, nearly six times that of rival Jet Airways and nearly 10 times that of low-cost carrier SpiceJet, according to the data available with the stock exchanges.
InterGlobe’s IPO will be the biggest primary market offering since Bharti Infratel’s Rs 4,100-crore-plus public issue in December 2012, statistics compiled by Prime Database showed. The company filed its preliminary prospectus with the Securities and Exchange Board of India on June 30 and received regulatory clearance on September 11.
InterGlobe’s share sale is also the first by an Indian airline since the 2006 listing of Deccan Aviation, which was later taken over by Kingfisher Airlines. Jet Airways, then the country’s largest private airline, raised Rs 1,900 crore in February 2005.
The privately-held IndiGo is one of the two domestic carriers that makes a profit, the other being GoAir, which reportedly plans to tap capital markets as well.
According to a regulatory filing, InterGlobe reported a negative net worth of Rs 139.38 crore as of June 30. It reflects the June 30, 2015, payout of an interim dividend of Rs 1,207.08 crore for FY16, which was offset by profit after tax of Rs 640.43 crore for the three months ended June 30. The airline’s top-line stood at Rs 4,317.2 crore for the quarter.
Citigroup Global Markets, JPMorgan and Morgan Stanley are global co-coordinators and book running lead managers, along with Barclays, Kotak Investment Banking and UBS as book running lead managers.
Of the total issue size, the company is looking to raise a little more than Rs 950 crore in a pre-IPO placement on October 26. The minimum bid size is 15 shares.
A couple of months ago, IndiGo placed an order for purchase of 250 Airbus A320neo jets — the largest ever single order for Airbus aircraft by number of jets. The order is expected to be completed before the end of this fiscal.
IndiGo was founded in 2006 by entrepreneur Rahul Bhatia and Rakesh Gangwal, a former chief executive of US Airways. The airline has used its low-cost model to stay profitable and become the largest airline in the Indian aviation sector.