IndiGo Approves $43 Million Loan to Subsidiary IndiGo IFSC

InterGlobe Aviation Ltd., the parent company of India’s largest airline IndiGo, has approved an unsecured loan of $43 million to its wholly owned subsidiary, InterGlobe Aviation Financial Services IFSC Pvt. Ltd. (IndiGo IFSC). The decision, made during the Board of Directors meeting on December 19, 2024, aims to support the subsidiary’s funding requirements for aircraft acquisitions.

The loan, which carries an interest rate based on the six-month SOFR benchmark plus an additional 275 basis points annually, is structured for a 10-year tenure. Interest payments are due monthly, with the principal repayment scheduled at the end of the term. No security will be provided for this loan, and the transaction adheres to the arm’s length principle under Section 186 of the Companies Act, 2013.

Subsidiary Operations at GIFT City

IndiGo IFSC, registered in the Special Economic Zone at Gujarat International Finance Tec-City (GIFT City), focuses on aircraft, engine, and ground support equipment leasing. The financial services arm was recently established with an initial investment of ₹30 crore. In addition to the loan approval, the board also agreed to issue corporate guarantees worth up to $996 million to meet the payment obligations of the subsidiary.

Quarterly Results 

For the July-September 2024 quarter, InterGlobe Aviation reported a net loss of ₹987 crore, marking its first loss in two years. This contrasts with a net profit of ₹189 crore in the same period the previous year. However, revenue from operations rose by 14% year-on-year, reaching ₹16,970 crore compared to ₹14,944 crore in the previous fiscal quarter.

Stock Performance & Closing Price

Shares of InterGlobe Aviation were trading at ₹4,409.30 on the BSE following the announcement at around 2:40 PM. Over the past 12 months, the stock has increased by 52.56%, and 46.72% year-to-date.

Compliance & Financial Framework

The loan aligns with regulatory requirements and reinforces IndiGo IFSC’s role in managing financial operations for aircraft acquisitions, an important component of the airline’s growth strategy.

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