The IPO of InterGlobe Aviation has been reduced second time even as the parent of India’s largest budget carrier IndiGo raised INR8.32 billion from anchor investors at INR765 per share. The IPO has been reduced by 1 million shares and the employee reservation portion now stands at 2.2 million shares, instead of the original 3.2 million shares.
In a related development, InterGlobe Aviation allotted over 10.87 million shares to more than 40 anchor investors including Monetary Authority of Singapore, the Singapore government, Abu Dhabi Investment Council – Tallyfish, Kuwait Investment Authority Fund 224, Credit Suisse Singapore Ltd Goldman Sachs India Fund, Sundaram Mutual Fund and Indus India Fund (Mauritius) Limited. Other anchor investors are Fidelity Securities Fund (Fidelity Blue Chip Growth Fund), Acacia Partners LP, Columbia Emerging Markets Fund, DB International (Asia) Ltd and DSP Blackrock India Tiger Fund. Barclays Bank PLC, Kotak Mahindra Capital Company Limited and UBS Securities India are managing the issue. The IPO would conclude on October 29.
The Offer for Sale comprises of shares from InterGlobe Enterprises, Rahul Bhatia, Rakesh Gangwal and Shobha Gangwal. The company plans to use IPO proceeds to retire outstanding lease liabilities, acquire new aircrafts, and purchase ground support equipment. Most of the proceeds are to be used to pay off nearly one-third of its total debt of INR11 billion. Currently, IndiGo has a fleet of 98 aircraft and about 75 of them are on operating lease.
IndiGo Airlines has 36% market share and expects to grow beyond 50%. IndiGo ordered the largest single order of Airbus aircraft for purchase of 250 Airbus A320 neo jets. IndiGo is one of the two domestic carriers that make profit other than GoAir. InterGlobe’s INR30 billion IPO is one of the biggest in three years after Bharti Infratel’s INR41 in 2012. It will also be first issue from aviation sector since Jet Airways’ INR19 billion 2005 and Deccan Aviation’s 2006 issue. Subscribe to our newsletters or follow us on Twitter for latest updates on InterGlobe Aviation’s IPO performance.