IndiGo to file prospectus for Rs 2,500 crore IPO next week

Sources say the country's largest airline will go for an IPO later this year when market conditions are right

India's biggest airline IndiGo is set to file a prospectus next week for a domestic stock market listing, which is expected to raise as much as $400 million, according to three sources with knowledge of the matter.

IndiGo, owned by hospitality and travel company InterGlobe Enterprises, is aiming to win approval from Securities and Exchange Board of India (Sebi) in August, before hitting the market later in the year, one of the sources said.

The timing of the market debut will, however, depend on market conditions, the source said.

The sources declined to be named because they were not authorised to speak to the media.

IndiGo, founded in 2006, has used its low-cost model to stay profitable and become India's largest airline in a market enjoying strong growth in passenger numbers, but where most carriers lose money because of tough competition and high costs.

IndiGo has picked Citigroup, Kotak Investment Banking, Morgan Stanley and JP Morgan Chase as lead managers for the listing, as well as UBS and Barclays, two of the sources said.

The listing will include the sale of a mixture of primary and secondary shares, one of the sources said.

IndiGo did not immediately respond to a request for comment.

The airline, which flies a single family of narrow-body planes, now carries one in three of India's air travellers.

In October, it made a provisional order for 250 Airbus A320neo jets - the largest-ever single order for Airbus aircraft by number of jets - as it seeks to capture a bigger slice of India's fast-growing aviation market.

The order has not yet been finalised but is expected to be completed before the end of this year, industry sources say. The carrier has already placed firm orders for a total of 280 Airbus A320-family jets, of which it has taken delivery of 100.

Founded by travel entrepreneur Rahul Bhatia and Rakesh Gangwal, a former chief executive of U.S. Airways, IndiGo specialises in placing large orders for jets and selling them on to lessors before renting them back to reduce capital costs.

It has denied that the sale-and-leaseback model is the main driver of its profits, which stand out against chronic losses in the rest of the country's airline sector.