InterGlobe Aviation Pvt, owner of India’s biggest carrier IndiGo, plans to raise about $500 million from an initial public offering, people with knowledge of the matter said.
The offering will value the airline at about $4 billion, according to two of the people, who asked not to be identified as the information is private. The company will issue 12.72 billion rupees ($200 million) of new stock, while existing shareholders will seek to sell 30.15 million shares, InterGlobe said in a draft prospectus Tuesday, without revealing the price.
Low fares and economic growth that has 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 airlines have lost a combined $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.
Promoters Rahul Bhatia will sell 3 million shares out of 3.05 million held by him while Rakesh Gangwal will sell 3.75 million out of 60.8 million.
Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley will lead the offering. Barclays Plc, Kotak Mahindra Bank Ltd. and UBS Group AG are also working on the share sale.
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, 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 capitalization of $494 million while SpiceJet Ltd. is valued at $172 million.