India?s largest airline by passengers carrier, IndiGo, has sought permission from the Foreign Investment Promotion Board (FIPB) to bring in foreign investment into the company.
This follows an ?enabling provision?, added by the Indigo board to the company?s Memorandum of Association? through a special resolution passed at a meeting held on April 26 this year, that allows the company to form joint ventures, merge or sell stake to other companies.
IndiGo?s, or InterGlobe Aviation?s, FDI application will be taken up by the FIPB at its meeting scheduled for August 1, according to a notice for additional agenda items put up on the finance ministry?s website on Friday. No details of the investment or the partner were available. It?s not clear whether the company is getting a foreign airline as a partner or is seeking some other category of foreign investor.
IndiGo has lately been in the news for possible stake sale talks with airlines like Qatar and Emirates, while reports have also indicated that the carrier may be heading towards an initial public offering to raise funds. IndiGo has reportedly picked six banks, including Citigroup, JP Morgan Chase and Morgan Stanley, to raise about $400 million through an IPO next year ? the airline is believed to be valued at $3 billion.
Analysts feel IndiGo is easily the best airline to invest among domestic players because of a clean balance sheet. The carrier, which had a market share of 31.6% in June, currently operates a fleet of about 80 Airbus A320 aircraft. It reported a R787 crore profit in FY13, its fifth straight year of making money at a time when most rivals are heavily bleeding ? airline?s cumulative losses are about R50,000 crore.
