STOCK MARKET BSE NSE

IndiGo Heads for up to $400 Million IPO Amid Travel Boom - Sources

IndiGo, owned by hospitality and travel company InterGlobe Enterprises, has built a profitable base helped by its low-cost model using a single type of narrow-body planes.

Published: 27th March 2015 03:31 PM  |   Last Updated: 27th March 2015 03:31 PM   |  A+A-

Indigo_PTI

India's biggest airline by market share, IndiGo, is preparing to file a draft prospectus by May for a stock listing to raise $300 million to $400 million, two people with knowledge of the plans said, aiming to cash in on a boom in budget air travel.

While the draft prospectus is due to be filed in the next two months, the timing of the initial public offering has not been set, another person said, and will depend on market conditions. The people declined to be named because they were not authorised to speak to the media.

IndiGo, owned by hospitality and travel company InterGlobe Enterprises, has built a profitable base helped by its low-cost model using a single type of narrow-body planes. By contrast, rivals like SpiceJet (SPJT.BO) and Air India are losing money - even as millions more Indians travel each year - due to high operating costs and tough competition that has kept fares among the lowest in the world.

IndiGo, founded in 2006 by travel entrepreneur Rahul Bhatia and ex-U.S. Airways chief executive Rakesh Gangwal, has increased its share of India's overall domestic air travel market to a third. Its success story could make it an attractive investment, company watchers say.

"Crude prices have also fallen, so there would be good demand for its IPO," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

Even IndiGo, however, has not been immune to the cut-throat competition that has seen losses almost double for the industry as a whole. Its pre-tax profit halved to 4.78 billion rupees ($76 million) in the last financial year.

IndiGo has picked Citigroup (C.N), Kotak Investment Banking, Morgan Stanley (MS.N) and JP Morgan Chase (JPM.N) as lead managers for the listing, as well as UBS (UBSG.VX) and Barclays, the two sources said.

More from Business.

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL_2020
flipboard facebook twitter whatsapp