InterGlobe Aviation Ltd., which operates budget airline IndiGo, will sell shares to institutional investors to reduce promoter stake and comply with the minimum public shareholding norms.
The company will issue 2.24 crore fresh shares and certain promoter entities will sell another 1.12 crore shares through a qualified institutional placement on Monday, said a stock exchange filing after the carrier’s annual general meeting. Promoters Rakesh Gangwal, Shoba Gangwal, Asha Mukherjee and The Chinkerpoo Family Trust, who collectively held around 42 percent stake as of June, will offload shares through the QIP.
Other promoters including InterGlobe Enterprises Ltd., Acquire Services Private Ltd., Kapil Bhatia, Rahul Bhatia and Rohini Bhata will sell shares after 60 days from the completion of the QIP, but not later than November 2018, the filing added.
The airline operator had picked Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley to work on the share sale, Bloomberg had reported earlier.
According to Indian shareholding norms, companies need to ensure minimum public shareholding of 25 percent within three years of listing. InterGlobe has to reduce its promoters’ holding to 75 percent to meet the regulatory norm. The company’s founders held 85.85 percent of the company at the end of June, while public shareholding was at 14.15 percent, according to BSE data.
The airline, which has around 40 percent share of the domestic airline market, got listed on stock exchanges in November 2015.