Get ready for a different ride on IndiGo. India’s biggest airline is likely to file the prospectus for a stock market listing on Tuesday that will raise around $400 million (nearly Rs. 2,500 crore), two banking sources with knowledge of the matter said.
The initial public offering will include about $200 million (nearly Rs. 1,250 crore) of fresh equity infusion, the sources said, declining to be named because they were not authorised to speak to the media.
IndiGo, owned by hospitality and travel company InterGlobe Enterprises, is India’s largest airline by market share.
IndiGo’s plans have suddenly put the spotlight on the initial public offer (IPO) market. Apart from IndiGo, possible big-ticket IPOs from L&T Infotech, Cafe Coffee Day, RBL and Biocon’s Syngene this year could help boost the sentiment of the primary market.
IndiGo has managed to avoid the turbulence of the Indian skies by remaining profitable in an environment where the operating costs are very high. Centre for Asia Pacific Aviation (CAPA), an aviation consultancy, pegged IndiGo’s FY15 net profit at $150 million to $175 million (Rs. 1,000 crore to Rs. 1,100 crore). IndiGo had posted Rs. 317 crore net profit in 2013-14, which was nearly half of Rs. 787 crore it had reported the year before.
With a fleet of 95 aircraft and 633 daily flights, IndiGo flies to 33 destinations in India and five international destinations.
With a fall in oil prices, the outlook for the Indian aviation sector has improved. CAPA has also forecast that the domestic carriers are likely reduce their combined losses by 40 per cent at $680-750 million in FY16.