Deccan Aviation to raise Rs 400 cr through IPO

New Delhi, May 12: Deccan Aviation Ltd, which operates low-cost carrier Air Deccan, will enter the capital market on May 18 with an initial public offer of 2.45 crore equity shares of nominal value of Rs 10 each through a 100 per cent book building process.

The price band for the issue has been fixed at Rs 150 to 175. The issue closes on May 23.

The company proposes to raise Rs 368.19 crore at the lower end of the price band and Rs 429.55 crore at the higher end. The issue will constitute 25 per cent of the fully diluted, post-issue, paid-up capital of the company.

''The proceeds from the issue will be utilised to part-finance its expansion programme, including setting up of a pilot training centre in Bangalore at a cost of Rs 65.6 crore, a hangar facility for basic and medium-level maintenance checks in Chennai at Rs 40 crore, and market development initiatives and debt repayment of Rs 132.7 crore,'' said company's chief revenue officer John Kuruvilla.

The company's present fleet comprises 18 ATR turboprop aircraft and 11 Airbus A320 jet aircraft, all of which have a single-class passenger seat layout.

The company has orders in place for 96 aircraft which are scheduled to be delivered by 2012. The proposed acquisition in 2007 is 19 and another 13 in 2008, including through lease and hire purchase.

Air Deccan began scheduled operations in August 2003 and carried 4.1 million passengers till March 31. With 226 daily flights, it connects 52 airports in the country and commands a market share of 14.2 per cent.

UNI