Jet Airways has completed a heavily oversubscribed share sale which valued the company at Rs94.9 billion ($2.2 billion), as investors continue to throw money into India's airline sector on expectations of massive growth.

One-fifth of India's largest private airline was floated through the initial public offering (IPO), which raised Rs18.9 billion, and instantly made founder Naresh Goyal a paper billionaire as he retains 80% through his company Tailwinds. Net proceeds of the share sale will be used to repay debt and go towards capital expenditure.

The IPO could not have come at a better time for Jet as it prepares for more intense competition at home from new low-cost airlines.

One of the new starts is SpiceJet, which has signed for 10 737-800s from Boeing and will start with leased aircraft. It is being formed from the shell of former domestic airline ModiLuft, which operated between 1993 and 1996. Over the years several groups have tried to resurrect it and its biggest single shareholding group is now Royal Holdings Services, which is controlled by non-resident Indian nationals.

Other shareholders with minority stakes include Indian companies and international financial institutions such as ABN Amro, Citibank and Goldman Sachs. It recently sold Rs153 million worth of bonds to help support its return to operations.

Another well capitalised new start, Kingfisher, is looking to start operations with Airbus A320s in May. It has placed orders with Airbus for 10 A320s as well as three A319s, and will start with four leased A320s. Kingfisher is owned by Indian brewing and liquor giant UB Group.

Conglomerate Wadia Group, meanwhile, plans to launch budget carrier Go Air in September. Local industry sources say several other "serious" new players also plan to start operations.

Source: Airline Business