Low-cost airline IndiGo's parent firm InterGlobe Aviation has received approval from market regulator Sebi for its Rs 2,500 crore initial public offer. Under the offer, the company plans to issue fresh shares worth Rs 1,272 crore. An equivalent amount can be raised through sale of up to 3.01 crore shares by its existing shareholders.
The Securities and Exchange Board of India (Sebi) has cleared the proposed initial share sale and gave its final observations on the IPO on September 11. The papers for raising up to Rs 2,500 crore through the IPO were filed with Sebi in June this year. InterGlobe Aviation runs the country's biggest airline by market share under the IndiGo brand.
Citigroup, JPMorgan India, Morgan Stanley, Barclays, UBS Securities India and Kotak Mahindra Capital Company are managers for the share sale. IndiGo is one of the two profit-making domestic airlines. The only other profitable airline is GoAir.
The budget carrier saw its net profit jump over four-fold to Rs 1,304 crore in the last fiscal as it remained profitable for seven straight years. This was also the highest ever annual profit registered by the airline since its inception in 2005. It had posted a net profit of Rs 317 crore in the year ended March 31, 2014.
IndiGo's good showing in the last financial year was mainly on account of higher revenues despite the domestic aviation sector witnessing turbulent times that adversely impacted the balance sheets of most local carriers. The carrier witnessed its revenues climb to Rs 14,320 crore in the 2014-15 financial year. This is an increase of 25 per cent from Rs 11,447 crore revenues recorded in the fiscal ended March 31, 2014.
IndiGo has so far placed orders for 530 Airbus planes, making it one of the largest customers of the European aircraft maker. The carrier has already taken delivery of 100 Airbus A320 planes which it had ordered in 2005. It would take delivery of the remaining 430 aircraft over a period of ten years.
At present, listed domestic airlines include Jet Airways and SpiceJet while trading in long-grounded Kingfisher Airlines has been suspended for a long time.
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