IndiGo to retire debt from IPO proceeds

Travel industry major InterGlobe Aviation on Monday said it intends to settle about Rs.1,166 crore debt from the proceeds of its initial public offer (IPO) which is set to begin from next week.

The company which owns the budget passenger carrier IndiGo plans to raise over Rs.3,200 crore from the IPO next week. The IPO proceeds, the company said will be used to retire a part of its total debt of over Rs.3,900 crore.

According to the company's president Aditya Ghosh, the total debt of over Rs.3,900 crore has been accumulated on the account of aircraft purchases.

In September, the airline had firmed-up its earlier order of 250 Airbus A320 neo aircraft. The deal is expected to be worth a little over $25 billion. At present it has a total order of 430 airplanes. Apart from the recent order, the airline had placed an order for 100 A320s in 2005 and 180 A320neo in 2011.

The company added 17 new aircraft in its fleet during 2014-15. Currently it operates 97 aircraft offering 648 flights a day.

Furthermore, the company announced that it will launch its IPO on October 27-29, with a price band from Rs.700-Rs.765 per equity share.

Ghosh added that the company's turning a negative net worth was a 'non-event' and that it still had 'a cash balance of over Rs.3,500 crore .'

The company had turned a negative net worth of Rs.139 crore due to an exponential interim dividend of Rs.1,500 crore paid to the promoters for 2014-15.