The Malaysia-based airline confirmed that the technical problem on Flight OD206, was discovered by the crew who immediately carried out the emergency checklist and alerted the air traffic control towers before diverting the aircraft to Don Mueng International Airport.
The plane, a Boeing 737-900ER, departed Indira Gandhi International Airport at 10.05 pm last night carrying 121 passengers including three infants and eight crew members.
"The aircraft was supposed to have arrived at Kuala Lumpur International Airport 2 (KLIA2) at 5.25 am this morning," said the statement, adding that it had landed safely at 2.25 am, Monday (in Bangkok).
"The passengers are being taken care of by Thai Lion Air and arrangements to put them on another flight to Kuala Lumpur at 3.45pm (4.45pm Malaysian time) are already under way," the airline said in a statement.
The technical issue is being investigated and has been formally reported to the relevant authorities, the engine and aircraft manufacturer, the statement said.
Malindo Air chief executive officer R Chandran told The Star Online that oxygen masks had been deployed soon after the problem was encountered, when the aircraft was over Yangon, Myanmar.
However, he said, this was a standard practice when an aircraft experienced decompression.
"When there is decompression, the oxygen mask will come down and the pilot will go to the safest altitude to ensure that everything is under control," he said.