Brazil's TAM unit Multiplus plans $721.2 mln IPO

* TAM mileage unit Multiplus may raise $721.2 mln in IPO

* Multiplus to use proceeds to buy TAM tickets for awards

* Multiplus stock to begin trading Feb. 5

SAO PAULO, Jan 19 (Reuters) - Multiplus SA, which manages the mileage program for Brazil's largest airline TAM Linhas Aereas (TAMM4.SA)(TAM.N), may raise as much as 1.28 billion reais ($721.2 million) in an initial public offering, seeking to benefit from growing appetite for emerging-market stocks.

Multiplus, launched in June after expanding TAM's frequent-flier program to include retailers, hotels and other types of services, plans to use the majority of proceeds to buy tickets issued by TAM to give as awards for its clients.

The company plans to sell 39.3 million shares, equivalent to a 25 percent stake, in a primary offering at a price range of 18 reais to 24 reais.

The offering might increase by 13.8 million shares if underwriters exercise their option to sell additional stock to meet demand. Multiplus expects its shares, listed under the "MPLU3" symbol, to begin trading on Feb. 5 at the Sao Paulo stock exchange.

The IPO comes as TAM, Gol Linhas Aereas (GOLL4.SA) and other Brazilian airlines recover from a slump in travel demand amid the worst crisis in civil aviation since 2001. Analysts have said the third quarter marked a turning point for local airlines, which will benefit from future demand for passenger and cargo transport as well as growing tourism in and out of Brazil.

Multiplus' offering would be the third in Brazil in 2010 as companies look to benefit from a surge in stock prices.

There is also ample cash for stock offerings. According to research firm EPFR Global, emerging-market stock funds had inflows of $2.5 billion in the second week of January after a record $70 billion in net inflows in 2009.

Besides offering free TAM tickets in exchange for air miles, Multiplus also has agreements with retailers such as bookseller Livraria Cultura and the Brazilian unit of Wal-Mart Stores (WMT.N) that allow clients to exchange points for CDs, books and home appliances.

The company hired BTG Pactual, the investment bank founded by billionaire Andre Esteves, as lead underwriter for the offering. Credit Suisse (CSGN.VX) will also help manage the IPO, TAM said in a securities filing.

($1=1.768 reais) (Reporting by Elzio Barreto; Editing by Lisa Von Ahn)