Mumbai: InterGlobe Aviation Ltd, which owns India’s largest and most profitable airline IndiGo, posted a record ₹ 640.43 crore quarterly profit for the three months ended 30 June, but its net worth moved to negative terrain, the company said in its initial public offering (IPO) documents, less than a fortnight before the start of the share sale.

The latest documents also reveal that the shares on offer will be four million fewer and the offer price would be raised to a range of ₹ 700-765 per share, from ₹ 400-418 originally planned.

The airline notched up the profit on revenue of ₹ 4,317.19 crore for the quarter, according to the documents, which didn’t disclose profit and revenue for the year-ago period.

In September, IndiGo disclosed that it earned a record net profit of ₹ 1,304 crore for the year ended 31 March—a fourfold jump over the previous year. Revenue for the fiscal year ended March rose 25% year-on-year to ₹ 14,320 crore from ₹ 11,447 crore in the previous year.

IndiGo and other airlines are benefiting from higher passenger traffic and lower jet fuel costs, which have halved in the past year. Indian domestic air traffic demand grew 20.5% in the year to July compared with the year-ago period, according to the International Air Transport Association.

Even so, IndiGo reported a negative net worth of ₹ 139.38 crore as of 30 June.

The company, in its share sale prospectus, clarified that its shareholders’ funds declined from ₹ 426.22 crore as of 31 March.

“This negative net worth reflects the 30 June 2015 payout of an interim dividend of ₹ 1,207.08 crore for fiscal 2016, which was offset by profit after tax of ₹ 640.43 crore in the three months ended 30 June 2015," IndiGo said.

“If this financial position continues, it may make it more difficult or expensive for us to obtain future financing or meet our liquidity needs. Further, there can be no assurance that we will be able to achieve a positive net worth in the period going forward," the airline added.

Mint could not immediately contact the airline for a comment.

IndiGo is planning to sell shares worth ₹ 2,500 crore in an IPO between 27 October and 29 October.

The airline was seeking a pre-money equity valuation of about ₹ 14,500 crore and an enterprise value of ₹ 17,000 crore, Mint reported on 1 July. IndiGo filed its draft prospectus with the Securities and Exchange Board of India on 30 June.

In its latest filing, it has incorporated some changes. As per the draft prospectus filed in June, the airline’s existing shareholders were to sell 30.1 million equity shares via an offer for sale. As per the prospectus filed on Friday, IndiGo is selling only 26.1 million shares, four million fewer than the original plan.

This is because one of the promoter companies, IGT-InterGlobe Technologies Philippines Inc., has decided not to sell 4.034 million shares.

A senior investment banker involved in the issue said on condition of anonymity that IndiGo has now raised the price band in the changed circumstances to ₹ 700-765 per share. The airline had earlier been expected to sell the shares from 26-28 October at between ₹ 400 and ₹ 418 apiece.

Bankers to the IndiGo issue are Citigroup Global Markets India Pvt. Ltd, JP Morgan India Pvt. Ltd, Morgan Stanley India Co. Pvt. Ltd, Barclays Bank Plc, Kotak Mahindra Capital Co. Ltd and UBS Securities India Pvt. Ltd.

IndiGo, which had a 33.8% share of domestic passenger traffic in the year ended 31 March, operates a fleet of 97 planes and offers 648 flights a day.

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