Gearing up for take-off

Mumbai, Feb. 8: The price band for the initial public offer (IPO) of Jet Airways has been fixed at Rs 950-Rs 1,125 per share. The announcement clears the way for roadshows, the first of which will kick off in Mumbai on Friday.

The offer aims to garner Rs 1,942.51 crore if the price is Rs 1,125 and Rs 1,640.34 crore if it is Rs 950. The shares will have a face value of Rs 10. The issue will remain open between February 18 and February 24. Sources said the prospectus was filed with the Registrar of Companies today.

According to merchant bankers, Friday?s promo could be the only in India for a flotation that won the approval of Securities and Exchange Board of India (Sebi) last week.

Jet has put 20 per cent of its fully diluted equity on the block under the offer, based on book building. The IPO will be for 1.72 crore shares. Of this, there will be fresh issue of 1.42 crore shares, while 30.21 lakh? equal to a 4.2 per cent stake ? will be sold by Tail Winds, one of Jet?s promoters based in the Isle of Man. Naresh Goyal, the main promoter of Tail Winds, will get between Rs 287 crore and Rs 339.94 crore, depending on the final price fixed.

Sixty per cent of the issue will go to institutions, 15 per cent to high net worth individuals and 25 per cent to small investors. Jet employees have been offered 12 lakh shares.

According to the prospectus filed with the regulator, the purpose of the IPO is to leverage the benefits of listing, including better brand visibility and easier financing. It will also help repay loans from IFC and IDFC.

The lead managers to the issue are Deutsche Equities India Pvt Limited, HSBC Securities and Capital Markets (India) Pvt Ltd, UBS Securities India Pvt Ltd, Citigroup Global Markets India Pvt Ltd, DSP Merrill Lynch Ltd and Kotak Mahindra Capital Company.

Vetting the Jet Airways offer took more time than usual because Sebi officials were coming to terms with the nitty-gritty of the first-ever flotation by an Indian airline. Though shares of Royal Airways, a reincarnation of ModiLuft, are traded on Dalal Street, the firm has no aircraft now. It plans to buy new planes soon.

The Jet flotation coincides with the recent open-skies policy of the government under which private airlines like Jet and Sahara can fly to overseas destinations like London, Singapore, Colombo and Kuala Lumpur.