IndiGo Airline
Passengers stand at the ticket counter of Indigo Airlines at the airport on the outskirts of Agartala, capital of India's northeastern state of Tripura, October 16, 2014.Reuters

IndiGo is planning to raise about $400 million through an initial public offering (IPO). The budget airline is likely to file a prospectus with market regulator Sebi next week.

The 10 percent stake sale will value the budget airline at about $4 billion (₹25,200 crore).

According to aviation consultancy CAPA India, IndiGo's net profit for 2014-15 was $175 million (₹1,111.6 crore).

IndiGo, which is owned by hospitality and travel company InterGlobe Enterprises, hopes to get the approval of the the Securities and Exchange Board of India (Sebi) by August, Reuters reported, citing sources close to the matter.

The stake sale could happen later this year.

The timing of the IPO will depend on market conditions, said one of the sources. 

IndiGo is reported to have hired Citigroup Inc., Kotak Investment Banking, Morgan Stanley, JP Morgan Chase, UBS AG and Barclays plc, as lead managers for the listing.

The listing will comprise sale of primary and secondary shares.

Recently, the promoters of IndiGo have altered its shareholding structure to give more scope for overseas capital in the company's IPO.

Under the new capital structure, stake held by one of its promoters Rakesh Gangwal has become his personal holding. Gangwal held a stake of 47.88% through US-based Caelum Investment.

Changes to the shareholding pattern come in the wake of merger of Caelum Investment with Interglobe Aviation, IndiGo said in a filing with the Registrar of Companies.

Gangwal, a non-resident Indian (NRI), can make 100% investment in any airline under the current rules. The former chief executive of US Airways is regarded as the key person responsible for the success of the low-cost airline IndiGo.

Apart from Caelum, Rahul Bhatia owns 51.12 percent in the airline. However, Bhatia and Gangwal will hold the same number of shares even after changes to the shareholding structure.

Industry experts say that IndiGo is making changes to allow sale of shares to overseas buyers as and when it issues an IPO, Business Standard reported.