InterGlobe Aviation Ltd, India's top airline company that operates budget carrier IndiGo, has received capital markets regulator Securities and Exchange Board of India's (SEBI) approval to float an initial public offer (IPO).
The company had filed its draft red herring prospectus (DRHP) with SEBI in July this year to raise Rs 1,272 crore through issue of fresh shares besides an offer for sale by its existing shareholders. This would be one of the biggest IPOs in the past few years.
Founded around a decade ago by travel industry entrepreneur Rahul Bhatia (now 55) and aviation industry veteran Rakesh Gangwal (now 61), who also served as CEO of US Airways, IndiGo went on an aggressive expansion drive. It trumped legacy carriers to emerge as the top carrier in the country leveraging nifty management of aircraft leasing coupled with bulk buys from airplane makers.
It posted record profit for the year ended March 31, 2015, partly boosted by low jet fuel prices.
IndiGo is the second company to get SEBI's nod for IPO in September after international SIM card provider Matrix Cellular received green signal early this month.
Several other companies like coffee chain operator Coffee Day Enterprises Ltd, Mumbai-based S.H. Kelkar & Co. Pvt Ltd, brokerage firm SMC Global, engineered systems and solutions manufacturer Uniparts India and Precision Camshafts have also got SEBI's green signal for proposed IPOs since January this year.
InterGlobe Aviation plans to use Rs 1,165.5 crore to retire outstanding lease liabilities for aircraft and Rs 33.3 crore for purchase of ground support equipment for airline operations.
Citigroup, J.P. Morgan, Morgan Stanley, Barclays, Kotak Mahindra Capital and UBS Securities are managing the issue.