IndiGo board approves Rs4,000 crore institutional share sale
The share sale will help IndiGo parent InterGlobe Aviation cut its owners’ stake to achieve the minimum public shareholding of 25%
Mumbai: InterGlobe Aviation Ltd, which runs low-fare airline IndiGo, Monday said its board has approved a sale of shares to institutions. At the company's closing share price on Monday, the sale is likely to raise around Rs4,000 crore.
A committee on issuing securities appointed by the board has approved selling up to 33.57 million shares, including a fresh issue of 22.38 million shares and a secondary share sale of 11.19 million shares by promoters Rakesh Gangwal, Shobha Gangwal, Asha Mukherjee and the Chinkerpoo Family Trust, the company said in a stock market filing.
The committee also approved the filing of a so-called red herring prospectus of the share sale with relevant regulatory authorities and the stock exchanges.
At its Monday closing share price of Rs1,220.30, the sale could be worth around Rs4,097.5 crore. The fresh issue of shares could fetch the company around Rs2,731.7 crore.
The share sale is likely to be launched in the next few days.
On 21 July, Bloomberg reported that IndiGo had appointed investment banks Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley to work on an institutional share sale.
The share sale will help the company cut its owners’ stake to achieve the minimum public shareholding of 25%.
The founders of InterGlobe held 85.85% in the company at end of June, according to data from stock exchanges.
According to the rules, companies need to ensure minimum public shareholding of 25% within three years of listing. InterGlobe has to reduce its promoters’ holding from 85% to 75% to meet the regulatory norm.
IndiGo is controlled by Rahul Bhatia and Rakesh Gangwal.
The airline, which has around 40% share of the domestic airline market, got listed on stock exchanges on 10 November 2015.
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