Khaitan & Co was able to complete InterGlobe Aviation’s institutional placement programme (IPP) of 33.5 million equity shares within a short timespan of 50 days despite aviation being a highly regulated sector, said a lawyer involved in the deal.
The company operates the profitable airline IndiGo, and its share sale brought in ₹37.9 billion (US$584 million).
“One of the key challenges was to plan and complete the transaction before the trading window of the companies closed and the financials expired,” Abhimanyu Bhattacharya, a partner in Khaitan’s Mumbai office, told India Business Law Journal. “We were also instrumental in structuring this transaction, assisting the company on pre-transaction activities, such as setting up the data room, familiarizing them with disclosure requirements for an IPP, and obtaining all the necessary regulatory, contractual and corporate approvals.”
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InterGlobe Aviation’s IPP was the largest to date in India, and the only one to have a sale component. The issue was opened and closed on 15 September and the issued equity shares were listed on the Bombay Stock Exchange and National Stock Exchange on 21 September. Khaitan & Co was legal counsel to the issuer and the selling shareholders, namely Rakesh Gangwal, Shobha Gangwal, Asha Mukherjee and the Chinkerpoo Family Trust. Executive director Sudhir Bassi was the most senior of the 12 team members to work on the share sale. He was supported by Bhattacharya and associate partner Aditya George Cheriyan, who comprised the core deal team. Navodita Gupta (senior associate), Ashima Gulati (associate) and Shreya Vajpei (associate) also worked on the deal.
Bhattacharya said IPPs were more common in 2013-14, when listed companies that needed funds used this route to comply with the minimum public shareholding (MPS) requirement of 25%. However, in the past two years, there have only been a handful of IPPs. The Securities and Exchange Board of India introduced IPPs in January 2012 as one of the routes to achieve the MPS.
Promoters held 85.5% of InterGlobe Aviation prior to the share sale and the company has until 9 November 2018 to achieve the MPS, which is three years from the date of its listing.
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