IndiGo is looking to raise capital potentially up to Rs 4,000 crore at current market prices by sale of equity shares to qualified institutions. (Image: Reuters)

India’s largest airline IndiGo has approved a share sale of up to 3.6 crore equity shares to qualified institutions, which could potentially raise up to Rs 4,000 crore at current market prices. The share sale will likely help the company achieve the minimum public shareholding of 25%, by reducing the owner’s stake.

According to a regulatory filing issued by the company yesterday, the company will sell up to 33.57 million shares, which includes a fresh issue of 22.38 million shares and a secondary share sale of 11.19 million shares by promoters Rakesh Gangwal, Shobha Gangwal, Asha Mukherjee and the Chinkerpoo Family Trust. At yesterday’s closing share price of Rs 1,220.30, the sale could fetch up to Rs 4,097 crore. Similarly, the fresh issue could be worth more than Rs 2,700 crore.

The company which listed on the stock exchanges on 10 November 2015, has to achieve the 25% shareholding within three years of listing, according to regulation. As at the end of June, the founders of InterGlobe held 85.85% in the company. InterGlobe has to reduce its promoters’ holding from 85% to 75% to meet the regulatory norm.

The shares have returned 48% in the year so far as compared to the 19.74% returned by BSE Sensex in the same period. IndiGo shares have seen a slight correction of late and the shares have shed 2% in the last month. On Tuesday morning, the scrip was trading at Rs 1,212, down by more than 0.3%.

The no-frills airline, which has the largest share in the domestic aviation market, expects to have 20 turbo prop aircrafts by January 2019, which it plans to deploy on the regional routes under the UDAN scheme initiated by the government of India.