[MUMBAI] InterGlobe Aviation Pvt, owner of India's biggest carrier IndiGo, plans to file a draft prospectus as early as Tuesday for an initial public offering of about US$500 million, people with knowledge of the matter said.
The offering will value the airline at around US$4 billion, according to two of the people, who asked not to be identified as the information is private. The company plans to raise around US$200 million by issuing new stock, with the remainder to come from shares being sold by existing investors, two people said.
Low fares and economic growth that boosted incomes over the past decade helped IndiGo find first-time flyers and become the biggest airline in the world's second-most populous nation. The profitable carrier is a rare bright spot in India's fiercely competitive aviation sector, where carriers have lost a combined US$10 billion since 2009 and IPOs have fallen below their sale prices.
IndiGo, which flies mostly within the country, operates a fleet of single-aisle planes from Airbus Group SE. The carrier started operations in August 2006 just as a rash of budget airlines entered the country, challenging full-service carriers like Jet Airways India Ltd on expectations that rail passengers would trade up to flights.
Kingfisher Airlines Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley will lead the offering, according to the people. Barclays Plc, Kotak Mahindra Bank Ltd and UBS Group AG are also working on the share sale, the people said.
IndiGo President Aditya Ghosh didn't immediately respond to a text message and call to his mobile phone. Sakshi Batra, an external spokeswoman for IndiGo, didn't immediately respond to a request for comment.
The IPO would be India's biggest since December 2012, when Bharti Infratel Ltd raised 40.9 billion rupees (US$642 million), data compiled by Bloomberg show. The share sale is the first by an Indian airline since the 2006 listing of Deccan Aviation Ltd, which was later taken over by Kingfisher Airlines Ltd.
Jet Airways, then India's largest private airline, raised 19 billion rupees in its 2005 IPO. The carrier, which is part- owned by Etihad Airways PJSC, now has a market capitalisation of US$494 million while SpiceJet Ltd is valued at US$172 million.