IndiGo's huge cash reserve to be used on capacity building

The company will earn more than 5,000 crore through sale of shares

The proposed sale and issue of fresh shares by IndiGo can fetch India’s largest airline Rs 5,370 crore, providing a major impetus to its expansion plans. 

The airline has announced the sale of 33.6 million shares, 22.3 million shares through fresh issue, to institutional buyers in order to comply with rules for companies to lower promoter stakes and achieve a public shareholding of 25 per cent.

Back-of-the-envelope calculations show the number of IndiGo shares after the issue will increase from 361.5 million to 383.98 million, which will raise the company’s retained earnings to Rs 2,680 crore. Retained earnings refer to net