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AirAsia India could go public: Fernandes
Posted on Thursday, 11 January 2018 10:40
AirAsia chief executive Tony Fernandes has kicked the rumour mill into overdrive with a series of tweets yesterday indicating the Malaysian airline is considering listing its Indian low cost carrier joint venture with Tata Sons.
Fernandes posted AirAsia India is “not far from 20 plans and a potential IPO [initial public offering]” despite the fact that “analysts [are] giving zero value” to the no-frills airline.
However, he said it is a “very valuable asset with huge growth potential” and as such “AirAsia will be seeing approval at the next AirAsia India board to pick a banker to start prelim process”.
Crucial Perspective, a specialist in Asian transportation equities, said on its website that based on its own preliminary estimates, the venture could be worth about USD 408.00 million on listing.
It added this means AirAsia’s 49.0 per cent stake could be valued at USD 200.00 million, which is the equivalent to 6.4 per cent of the Kuala Lumpur-based carrier’s current capitalisation.
However, this is only on the basis that the joint venture reaches the 20 fleet barrier required under Indian regulations before it can start running routes to foreign destinations.
Crucial Perspective noted AirAsia India has a 4.0 per cent market share on domestic routes in India, as at December 2017, far behind sector leader IndiGo (41.0 per cent) and Jet Airways (17.0 per cent).
The company doubled passengers carried to 1.20 million in the third quarter of 2017 and increased revenue to INR 3.95 billion (USD 61.97 million) for the three months, though it booked a net loss of INR 164.00 million.
Fernandes also posted a tweet saying AirAsia, which has a tagline of “Now Everybody Can Fly”, is in the process of hiring an advisor to help find a partner for its shared services centre business.
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