IndiGo’s goes for IPO

MUMBAI  India’s booming budget airline IndiGo hopes to raise up to USD500 million in a share sale, next week, that will help fund expansion, its president Aditya Ghosh said Monday.
IndiGo had previously said it would seek USD200 million through the initial public offering (IPO) but Ghosh wants a bigger war chest to extend the carrier’s dominance of India’s budget airline market.
“There is huge opportunity in India due to very limited supply and rising demand,” Ghosh told reporters in Mumbai, announcing that the IPO would open to the public 27 October.
The sale will run for three days and IndiGo hopes to raise between USD470 million and USD500 million, Ghosh said, adding that some of the funds would go to trimming the airline’s debt.

inside no 10IndiGo was launched in 2006 and quickly became India’s largest carrier, enjoying a nearly one-third share of the domestic air market as tens of millions of increasingly affluent citizens take advantage of cheap air travel.
Increased demand over the past decade has fuelled a price war among Indian airlines, which coupled with rising fuel costs, have sent most domestic carriers deep into the red.
IndiGo has bucked the trend however, largely thanks to its no-frills approach and new fuel-efficient aircraft, and is the only Indian carrier to have consistently reported profits in recent years.
“We have a simple model and we intend to keep it. There is no need to complicate things with frequent flyer programme or lounges,” Ghosh said.
IndiGo will sell shares for between 700 rupees (USD11) and 765 rupees. The IPO will close on October 29 and is set to be the largest in India in three years.
It comes after the Cafe Coffee Day chain floated on the stock market last week as India’s IPO market enjoys a mini resurgence.
In August, IndiGo placed an order worth USD26.5 billion with Airbus for 250 A320neo planes.
IndiGo’s debt currently stands at 39.12 billion rupees, according to Ghosh.

sourced:ttrweekly.com