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IndiGo board approves Rs4,000 crore institutional share sale

LiveMint logoLiveMint 11-09-2017 Swaraj Singh Dhanjal

Mumbai: InterGlobe Aviation Ltd, which runs the IndiGo airlines, said Monday that its board has approved an institutional share sale of around Rs4,000 crore, according to a stock exchange filing.

According to the filing, an “Issue of Securities Committee” appointed by the InterGlobe Aviation board, approved the sale of up to 33.57 million shares, including a fresh issue of 22.38 million shares and a secondary share sale of 11.19 million scrips by promoters Rakesh Gangwal, Shobha Gangwal, Asha Mukherjee and The Chinkerpoo Family Trust.

The committee also approved the filing of the so-called red herring prospectus of the share sale with relevant regulatory authorities and the stock exchanges.

The share sale can fetch InterGlobe Aviation about Rs4,097.50 crore at the closing price of Rs1,220.30 apiece on Monday. The fresh issue of shares could fetch the IndiGo operator Rs2,731.70 crore. The share sale is likely to be launched in the next few days.

The share sale will help InterGlobe Aviation 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 Indian shareholding norms, 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.

On 21 July, Bloomberg reported that IndiGo had appointed investment banks Citigroup Inc., JPMorgan Chase and Co. and Morgan Stanley to work on an institutional share sale.

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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