Sebi clears IndiGo's Rs2,500-crore IPO plan

Securities and Exchange Board of India (Sebi) has approved a proposal by InterGlobe Aviation, the parent firm of no-frills carrier IndiGo, for a Rs2,500 crore initial public offer (IPO).

Under the offer, the company plans to issue fresh shares worth Rs1,272 crore and raise an equivalent amount through sale of up to 30.1 million shares by its existing shareholders.

interGlobe Aviation, which runs the country's biggest airline by market share, had filed the IPO application with Sebi in June. The market regulator has cleared the proposed initial share sale and gave its final observations on the IPO on 11 September.

The papers for raising up to Rs2,500 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, one of the two profit-making domestic airlines, reported a four-fold jump in its net profit to Rs1,304 crore in the last fiscal. It was also the highest ever annual profit recorded by the airline since its inception in 2005.

IndiGo had posted a net profit of Rs317 crore in the year ended 31 March 2014. The carrier saw its revenue climb to Rs14,320 crore in the 2014-15 financial year. This is an increase of 25 per cent from Rs11,447 crore revenues recorded in the fiscal ended 31 March 2014.

The only other airline in India to report a profit is GoAir.

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.

While much of the credit for IndiGo's good showing in the last financial year was mainly on account of higher revenues and lower fuel spends, the airline has been more prudent than its peers in maintaining balance sheet even in times of adversity.