India's only profitable airline, IndiGo, is restructuring its stake holding to become eligible for foreign direct investment (FDI), ahead of an impending initial public offering (IPO). IndiGo's holding company InterGlobe Aviation Ltd is currently 48% owned by cofounder Rakesh Gangwal's US-based Caelum Investments. This investment falls under FDI and current rules allow an airline to have only 49% FDI from foreign airlines and companies. To be able to get 49% FDI, IndiGo has sought Foreign Investment Promotion Board's (FIPB) nod to convert Gangwal's 47.9% stakeholding from FDI to investment under non resident Indian (NRI) head. Conversion of Gangwal's stake from FDI to NRI will make IndiGo eligible for FDI, just like Jet Airways, which was almost 80% owned by founder Naresh Goyal's NRI investment from Isle of Man-based Tale Winds at the time when Etihad was allowed to pick up 24% stake in it. NRIs can hold up to 100% stake in an Indian airline.
Caelum Investment is also majorly owned by NRIs with Gangwal and his wife having 60% stake in it. The plan is to merge Caelum with InterGlobe Aviation. In place of the 147,000 equity shares held by Caelum in InterGlobe Aviation, the latter will issue an equal number of shares at a face value of Rs 1,000 to the NRI members of Caelum.
While Gangwal's Caelum holds 47.9% stake in Inter Globe Aviation, the remaining is owned by co-founder Rahul Bhatia's InterGlobe Enterprises Ltd. The proposed restructuring will make IndiGo eligible for selling shares to FIIs, a significant move at a time when the airline is planning its IPO early next year. IndiGo is going to appoint Bank of Baroda's former chairman M D Mallya to its board.
A number of foreign carriers like Qatar have expressed interest in buying into the airline. The promoters, however, have not responded to those offers.
The Foreign Investment Promotion Board (FIPB) on Friday gave conditional nod to budget carrier IndiGo’s proposal for converting its co-founder’s 48% FDI into NRI investment so that it could clear up the 49% stake which an Indian carrier can sell to foreign companies, airlines or FIIs. “IndiGo’s proposal has been cleared subject to approval of high court,” an official said after a meeting of the Board that is headed by finance secretary Arvind Mayaram.
IndiGo sought the nod just ahead of an impending IPO so that it can sell shares to FIIs too.A number of foreign airlines like Qatar Airways have also expressed interest in buying into IndiGo.
IndiGo’s holding company InterGlobe Aviation Ltd is currently 48% owned by co-founder Rakesh Gangwal’s US-based Caelum Investments.This investment falls under FDI and current rules allow an airline to have only 49% FDI from foreign airlines and companies.To free up the allowed 49% FDI, IndiGo had sought FIPB nod to convert Gangwal’s 47.9% stakeholding from FDI to investment under non resident Indian (NRI) head. Conversion of Gangwal’s stake from FDI to NRI will make IndiGo eligible for FDI.
Caelum Investments is also majorly owned by NRIs with Gangwal and his wife having 60% stake in it. The plan is to merge Caelum with InterGlobe Aviation. In place of the 147,000 equity shares held by Caelum in InterGlobe Aviation, the latter will issue an equal number of shares at a face value of Rs 1,000 to the NRI members of Caelum.
While Gangwal’s Caelum holds 47.88% stake in InterGlobe Aviation, the remaining is owned by co-founder Rahul Bhatia’s InterGlobe Enterprises Ltd.
Caelum Investment is also majorly owned by NRIs with Gangwal and his wife having 60% stake in it. The plan is to merge Caelum with InterGlobe Aviation. In place of the 147,000 equity shares held by Caelum in InterGlobe Aviation, the latter will issue an equal number of shares at a face value of Rs 1,000 to the NRI members of Caelum.
While Gangwal's Caelum holds 47.9% stake in Inter Globe Aviation, the remaining is owned by co-founder Rahul Bhatia's InterGlobe Enterprises Ltd. The proposed restructuring will make IndiGo eligible for selling shares to FIIs, a significant move at a time when the airline is planning its IPO early next year. IndiGo is going to appoint Bank of Baroda's former chairman M D Mallya to its board.
A number of foreign carriers like Qatar have expressed interest in buying into the airline. The promoters, however, have not responded to those offers.
The Foreign Investment Promotion Board (FIPB) on Friday gave conditional nod to budget carrier IndiGo’s proposal for converting its co-founder’s 48% FDI into NRI investment so that it could clear up the 49% stake which an Indian carrier can sell to foreign companies, airlines or FIIs. “IndiGo’s proposal has been cleared subject to approval of high court,” an official said after a meeting of the Board that is headed by finance secretary Arvind Mayaram.
IndiGo sought the nod just ahead of an impending IPO so that it can sell shares to FIIs too.A number of foreign airlines like Qatar Airways have also expressed interest in buying into IndiGo.
IndiGo’s holding company InterGlobe Aviation Ltd is currently 48% owned by co-founder Rakesh Gangwal’s US-based Caelum Investments.This investment falls under FDI and current rules allow an airline to have only 49% FDI from foreign airlines and companies.To free up the allowed 49% FDI, IndiGo had sought FIPB nod to convert Gangwal’s 47.9% stakeholding from FDI to investment under non resident Indian (NRI) head. Conversion of Gangwal’s stake from FDI to NRI will make IndiGo eligible for FDI.
Caelum Investments is also majorly owned by NRIs with Gangwal and his wife having 60% stake in it. The plan is to merge Caelum with InterGlobe Aviation. In place of the 147,000 equity shares held by Caelum in InterGlobe Aviation, the latter will issue an equal number of shares at a face value of Rs 1,000 to the NRI members of Caelum.
While Gangwal’s Caelum holds 47.88% stake in InterGlobe Aviation, the remaining is owned by co-founder Rahul Bhatia’s InterGlobe Enterprises Ltd.
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