India’s top domestic airline, IndiGo has hired Citigroup Global Markets and Bank of America (BofA) to advise on its proposed qualified institutional placement (QIP), according to a report.
The final size of the offer, which is valued at ₹3,000 to ₹6,000, crore depends on the allotment price of the shares, said the report.
The QIP could dilute the stake of at least 10% for existing shareholders, including the airline’s sponsors, as per the report.
IndiGo, run by InterGlobe Aviation Ltd, had a market capitalization of ₹37,377.19 crore on Monday, according to BSE data.
“The capital is most likely to be raised through a qualified institutional placement (QIP),” as per the report.
An Indigo spokesperson said, “We do not comment on market speculation.” Citigroup and Bank of America declined to comment.
IndiGo posted a consolidated net loss of ₹870.81 crore in the March quarter, from a year-ago profit of ₹596 crore.
This was due to a surge in cost, amid tepid revenue growth, which was compounded by flight restrictions to international sectors that saw a rise in covid-19 cases.
“Amid the crisis situation, we strive to manage not for profitability or growth but for liquidity,” IndiGo’s chief executive Ronojoy Dutta told Mint last month.
“Our focus is on managing our cash balance by reducing costs, maintaining liquidity, exploring alternative sources of revenue and building consumer and employee confidence through a safe and hassle-free flying experience,” he said.
“The market is still weak though the demand situation has improved since May. It could be a while before recovery to pre-covid level happens. Amid this, the airline’s plans are to reduce costs and maintain liquidity,” the report added.
(Source – Live Mint)