NEW DELHI: Low-cost carrier IndiGo will dilute promoter stake to comply with regulatory norms. InterGlobe Aviation, IndiGo’s parent company, said in a BSE filing on Wednesday that its board will meet on July 31.
Among other things, the LCC board will “consider the means of achieving the minimum public shareholding in the company in accordance with the applicable laws including through a follow on public offer and/ or an institutional placement programme which may comprise of a fresh issue and / or an offer for sale and recommend the same for the approval of shareholders of the company, if required.”
Promoted by Rahul Bhatia and Rakesh Gangwal, IndiGo was listed in 2015. As per norms, it has three years to reduce public shareholding to 75 per cent from the current 85 per cent level. The airline seems to have preponed this. The further equity sale to the public could raise anywhere up to Rs 6,000 crore.
IndiGo, which has free cash of Rs 4,500 crore, recently took two decisions which took the industry by surprise — placing an order for turboprops to cash in on the government’s regional connectivity scheme and expressing interest in acquiring Air India and AI Express‘ international operations to enter the field of long haul low cost flights. IndiGo currently has about 140 aircraft, with nearly 450 more on order.
Source: Times Of India