English | मराठी 

IndiGo faces litigations involving Rs 1,114 crore


New Delhi: No-frills carrier IndiGo is facing multiple litigations, including those related to income and service tax, involving an amount of at least Rs 1,114 crore.

The profitable airline is gearing up to come out with an initial public offer worth about Rs 2,500 crore, that includes fresh issue of equity and Offer for Sale (OFS).

InterGlobe Aviation Ltd, which is operating IndiGo, is facing various litigations involving an amount of at least Rs 1,114 crore.

“There are 329 legal notices issued to our company involving an aggregate amount of Rs 5,525 million (Rs 552.5 crore). These include 50 notices in which the amount involved is in excess of Rs 1 million (Rs 10 lakh). These notices are pending,” according to the draft paper filed with capital market regulator Sebi for the IPO.

There are eight income tax and six service tax proceedings involving total amounts of Rs 156.99 crore and Rs 168.49 crore, respectively.

Besides, the company is facing nine proceedings related to VAT involving about Rs 12.54 crore.

There are also eight customs-related litigation and the amount involved is Rs 80.33 crore.

“Due to the nature and extent of our operations, our company is involved in a large number of cases and is regulated by various regulatory authorities who have the authority to impose penalties for various levels of default,” it said.

The company’s directors, promoters and group entities are also involved in some litigations.

In the nine months ended December 2014, IndiGo posted a profit of Rs 720.84 crore on revenues of Rs 10,359.79 crore.

“We believe that we have a strong balance sheet which we believe provides us with a number of competitive advantages, such as lower finance costs and better financial terms from aircraft lessors and suppliers of aircraft components,” it said in the Draft Red Herring Prospectus (DRHP).

At the end of December 2014, the entity had total indebtedness of Rs 4,002.82 crore and Rs 2,474.60 crore of net debt.

“…all of our indebtedness was aircraft related and we did not have any indebtedness for working-capital.

“We believe that the strength of our balance sheet provides us with a competitive advantage by allowing us the flexibility to fund future growth and not be constrained by reliance on non-aircraft financing sources,” it said.

IndiGo plans to utilise the share sale proceeds for retirement of certain outstanding lease liabilities and consequent acquisition of aircraft, purchase of ground support equipment for airline operations and general corporate purposes.

Leave a Reply