IndiGo IPO Prospectus Expected Next Week

IndiGo is reported to be ready to release a prospectus next week for a domestic stock market listing, which is expected to raise USD$400 million.

IndiGo, owned by hospitality and travel company InterGlobe, is aiming to win approval from India's market regulator in August, before hitting the market later in the year, according to Reuters news agency.

The timing of the market debut will, however, depend on market conditions.

IndiGo, founded in 2006, has used its low-cost model to stay profitable and become India's largest airline in a market enjoying strong growth in passenger numbers, where most carriers lose money because of tough competition and high costs.

In October, IndiGo made a provisional order for 250 Airbus A320neos as it seeks to capture a bigger slice of India's fast-growing aviation market.

The carrier has already placed firm orders for a total of 280 Airbus A320-family aircraft, of which it has taken delivery of 100.

Founded by travel entrepreneur Rahul Bhatia and Rakesh Gangwal, a former chief executive of US Airways, IndiGo places large orders for aircraft and sells them on to lessors before renting them back to reduce capital costs.

It has denied that the sale-and-leaseback model is the main driver of its profits, which stand out against chronic losses in the rest of the country's airline sector.