IndiGo IPO opens for bidding on 27 October 2015

IPO price band fixed at Rs 700 to Rs 765 per share

The initial public offer (IPO) of InterGlobe Aviation, the operator of low cost passenger airline IndiGo opens for bidding on 27 October 2015. The IPO comprises of fresh issue of equity shares aggregating Rs 1272.20 crore and offer for sale of up to 2.61 crore shares by existing shareholders of the company. The price band for the IPO has been set at Rs 700 to Rs 765 per share. The IPO is scheduled to close on 29 October 2015.

InterGlobe Aviation is promoted by Mr. Rahul Bhatia, Mr. Rakesh Gangwal, InterGlobe Enterprises and Acquire Services. Promoters are selling a part of their holding through the IPO. Mr. Rahul Bhatia is selling 30.06 lakh shares, Mr. Rakesh Gangwal is selling 37.59 lakh shares and InterGlobe Enterprises is selling 32.90 lakh shares through the IPO. Some of the members of the promoter family are also selling shares via the IPO. From non-promoters, a total of 7 entities are selling shares through the IPO.

The company intends to use the proceeds of the fresh issue of shares primarily to retire its aircraft lease obligations. It will utilize Rs 1165.66 crore to retire some of the exiting aircraft lease obligations. The company will utilize Rs 34.25 crore for purchase of ground support equipment for its airline operations and the remaining amount for general corporate purposes.

IndiGo is India's largest passenger airline with a 33.9% and 37.4% market share of domestic passenger volume for the year ended 31 March 2015 and the five months ended 31 August 2015, respectively, according to the DGCA. IndiGo operates as a low-cost carrier or LCC business model and focuses primarily on the domestic Indian air travel market.

InterGlobe Aviation reported net profit of Rs 640.43 crore on revenue from operations of Rs 4211.54 crore in Q1 June 2015. Net profit stood at Rs 1295.58 crore on revenue from operations of Rs 13925.33 crore for the year ended 31 March 2015 (FY 2015).

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