New Delhi, June 6
THE low-cost airline, Air Deccan, plans to tap the capital market with an initial public offering (IPO).
"We are seriously considering the option. However, we have not decided whether the airline should enter the market in November after the half-yearly results are out or wait till March next year when the results of the full-year are ready," the airline Chairman and Managing Director, Captain G.R. Gopinath, said.
Indications are that the company owning the airline may offer 20-25 per cent of its equity through the IPO.
The airline hopes to raise between $250 million and $300 million through the IPO.
The funds garnered from the IPO will be used not only for funding the airlines aircraft acquisition plans but also for setting up an engineering facility. The airline is to acquire 12 aircraft this year including six Airbus A-320. Besides the airline is to get six ATR 72-500 one of which it is to take delivery of later this month at the Paris Air Show.
The low-cost airline has also approved a plan to offer 10 per cent of the equity to its employees.
Air Deccan hopes to carry four million passengers during the current year and report revenues of Rs 1,000 crore. "At the moment we are not sure on how much profit the airline will report during the year. The airline, however, is definitely on course to declare a marginal profit during the year," Captain Gopinath said.
The airline had done business worth about Rs 350 crore during the previous year and had just about scrapped through to report a profit, he said.