NRI owned Jet Airways IPO to open next week

BOMBAY, Feb 7, 2005
(Reuters)

The initial public offer (IPO) of India's biggest domestic airline, Jet Airways, is expected to open next week, and bids will be invited in a band around 900 rupees per share, sources said on Monday.
Jet Airways (India) Ltd. plans to offer 17.27 million shares, or 20 percent of its expanded equity to help repay debt, build new facilities and fund expansion in an increasingly competitive market.

The airline has said it hopes to raise 15 billion rupees, which would value it at 75 billion rupees.

Jet, founded by Naresh Goyal, a non-resident Indian and former travel agent, has grown rapidly since its founding in 1993 and surpassed state-owned Indian Airlines Ltd., which for decades was a monopoly provider of domestic air services.

The IPO is the first in a series of share offers lined up by Indian companies this year, as they seek to raise funds to meet the growing needs of a rapidly growing economy.

"The issue will open either on Feb.17 or Feb.18," said a source close to the offer.

He said the company would hold only one road show in India, in the financial capital of Bombay on Feb. 11. The rest will be held overseas.

Last year, Indian companies mopped up about $2.9 billion through IPOs and an additional $3.9 billion through public share issues, and merchant bankers expect this year's tally to outpace that.

Of Jet's total offer, 82.5 percent or 14.25 million shares will be new equity while the remaining 3.02 million will be a sale of existing shares by parent company Tail Winds Ltd.

Other competitors include Air Sahara, Air Deccan, Royal Airways Ltd.

India has only recently allowed domestic private airlines to fly on lucrative international routes.

Several new airlines plan to launch in the next two years, encouraged by a government increase of the foreign investment cap for aviation to 49 percent from 40 percent last year.

Kingfisher Airlines, backed by the country's largest beer company UB Group expects to start operations by the end of April.

British entrepreneur Richard Branson is considering starting his own low-cost airline in India, according to media reports.

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