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Thursday, May 18, 2006

Deccan Aviation issue opens today

Deccan Aviation will hit the capital market with its inital public offer, IPO of 2.45 crore equity shares today. The issue will close on May 23 and the price band has been fixed at Rs 150 to Rs 175.

The company proposes to raise Rs 368.19 crore (Rs 3.68 billion) at the lower end of the price band and Rs 429.55 crore (Rs 4.29 billion) at the higher end of the price band. The issue will constitute 25 per cent of the fully diluted post issue paid-up capital of the company.

Enam Financial Consultants Private and ICICI Securities are book running lead managers for the issue and Karvy Computershare Private is the registrar to the issue.

The issue is being made through the 100 per cent book building process wherein at least 50 per cent of the issue shall be allotted to Qualified Institutional Buyers, QIBs on a proportionate basis out of which five per cent shall be available for allocation on a proportionate basis to mutual funds only.

Further, up to 15 per cent of the issue or the issue less allotment of the QIB portion and allocation to retail individual bidders will be allocated to non-institutional bidders.

The equity shares of the company are proposed to be listed on the NSE and the BSE.

The company proposes to utiltise the funds in setting up a training centre at Bangalore, setting up a hangar facility for base and medium-level maintenance checks at Chennai; and setting up infrastrucuture at airports.

Deccan Aviation Limited, a Bangalore based company operates Air Deccan, a low - cost commercial passenger airline and Deccan Aviation, a private helicopter and airplane chartering service in India. Air Deccan which began operations in Aug, 2003 was the first Indian airline to follow a no - frills, low - cost passenger airline business model. The business strategy focuses on offering low fares to attract cost conscious middle class and corporates, selecting new routes and reducing costs. Such a strategy seems to have worked well so far, as the airline has managed to corner a market share of 16% in three years of its operations. Deccan Aviation, India’s largest private heli - charter company provides heli - services for company charters, tourism, medical evacuation, off-shore logistics etc.

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