IndiGo IPO size pruned as Gangawal withholds shares

Low-cost carrier IndiGo's operator InterGlobe Aviation on Monday night lowered its initial public offering size by over Rs200 crore to nearly Rs3,000 crore, with one promoter deciding to sell less number of shares.

The reduction came on the first day of the roadshow for the much-awaited IPO, which is being seen as a test case for the revival of big-ticket share sales in the Indian primary market.

The promoters of the company, which is among the few profitable airlines in the country, will now sell nearly 23 million shares, down from about 26.1 million they had earlier proposed for the Offer For Sale component of the IPO.

The decision was taken hours after the company management began the IPO roadshow in Mumbai ton Monday, where it was announced that the public issue would be a fresh issue aggregating up to Rs1,272.2 crore and offer for sale of up to 26,112,000 shares.

The OFS component was proposed to comprise of 3,290,419 shares by InterGlobe Enterprises, 3,006,000 shares by Rahul Bhatia; 3,759,638 shares by Rakesh Gangwal and 2,227,316 shares by Shobha Gangwal, among others.

Sources told PTI that the Gangwal family has decided to reduce the number of shares to be offered by them for sale, resulting in lowering of the total OFS component to about 23 million equity shares.

This would bring down the IPO size, where the price band has been fixed at Rs700-765 a piece, to about Rs3,000 crore from Rs3,268 crore estimated earlier.

Earlier on Monday morning, InterGlobe Aviation said it will retire nearly one-third of its total debt of Rs3,912 crore from the share-sale proceeds. InterGlobe Aviation is the holding company of IndiGo airline. The company said it will retire Rs1,166 crore out of its Rs3,912-crore debt from the IPO proceeds.

Stating that the airline has not a single penny in working capital or non-aircraft purchase related debt, company president Aditya Ghosh said the entire Rs3,912-crore debt it has is related to aircraft purchases. Out of its nine years of existence, it has been profitable in seven years, he claimed.

The company recently declared an interim dividend of Rs1,500 crore to the promoters When asked about hefty payouts the promoters have been getting all this while, Ghosh had said, "As a manager my mandate is to keep my customers happy, my employees happy and also investors/shareholders. I have been doing as a private company and will continue to do so as public company going forward."

Ghosh said the company will launch its Rs3,268-crore public issue, the first from the airline sector after the Spicejet IPO, on 27 October, which will remain open till 29 October.