The Hindu Business Line : IPO: 12 lakh shares reserved for Jet Airways employees

JET Airways on Friday announced the price band of Rs 950-1,125 for its initial public offering. The airline is offering 1,72,66,801 equity shares of Rs 10 each for cash at a premium. The issue is to be made through a 100 per cent book building process.

At this price band, the offer size will range from Rs 1,640 crore to Rs 1,942.5 crore.

The book running lead managers said that while compared to international airlines such as Ryanair and Singapore Airlines, the valuation is "quite fair" in this price band.

The total issue size of 1.72 crore shares is constituted by 1.42 crore of fresh issue and an offer for sale of 30 lakh shares by Tail Winds Ltd. Together, this represents 20 per cent of the fully diluted post offer paid-up equity capital of the company. About 12 lakh shares are reserved for the employees of Jet Airways.

Proceeds of the IPO would be partly used in retiring the debts of the company. The company is also planning to buy 10 new Boeing 737 aircraft.

The issue remains open between February 18 and 24. Listing of the company would be around March 14.

The company has published its final draft red herring prospectus after incorporating the response to queries raised by the Securities and Exchange Board of India.

The public issue of Jet Airways is set to ride on the increase in market penetration and potential that they see for the Indian aviation industry.

"Currently, the number of flights per Indian per year is 0.02, which is much lower even when compared to other similar economies like Malaysia," said Mr Wolfgang Prof-Schaur, Chief Executive Officer, Jet Airways. The company also announced that the total revenues for the first nine months of the current year stood at Rs 3,198 crore. Revenues for the corresponding period in the previous year were Rs 2,605 crore.

The company made profits after tax of Rs 259 crore, up from the Rs 80.2 crore reported for the corresponding previous period, Mr Schaur said.

Jet Airways' brand name and logo were owned by a sister concern, Jet Enterprises.

The company said an agreement has been reached between the two companies and the brand name and logo would be transferred to Jet Airways.

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