InterGlobe Aviation: IndiGo stocks in focus as Rakesh Gangwal likely to sell Rs 6,600 crore shares
InCred Equities said IndiGo’s ASK to grow in line with the industry against higher earlier and sees a reduction in the gap in RASK-CASK between IndiGo against Air India/Vistara over FY20 till now.
- Mar 11, 2024,
- Updated Mar 11, 2024 7:28 AM IST
Shares of InterGlobe Aviation Ltd (IndiGo) will be in focus on Monday morning as the co-founder Rakesh Gangwal is said to be considering selling of up to 5.8 per cent stake in the airline for about Rs 6,600 at a floor price of Rs 2,925 per share, CNBC-TV18 reported. As per Moneycontrol, this was higher than a planned stake sale of 3.3 per cent earlier. Business Today could not independently verify the news report.
IndiGo shares closed at Rs 3,101.55 a piece on Thursday last week. The floor price of Rs 2,925 is a 5.69 per cent discount to the last closing price.
InCred Equities in a recent its recent high conviction stock ideas note suggested a 'reduce' on IndiGo. It said incremental groundings in Q4FY24 (35 planes; 5 per cent of industry fleet) would not impact tariff as IndiGo would lease more planes to meet its capacity target, and competitors are unscathed and their fleet is underutilised. It expects IndiGo’s entire fleet to be operational in FY26.
"This will increase the industry capacity by 14 per cent and dampen tariff. We factor Re0.11 RASK - CASK in FY26F (same as FY17-20 average). We have a REDUCE rating on the stock with a target price of Rs 2,000, valuing it at 8.5 times FY26 EV/EBITDAR against a median multiple of 8.8 times (Nov 2015 to now, excluding the Covid-19 pandemic period). We believe the slight discount is warranted as the time for resolution of grounded fleet is uncertain," it said.
InCred Equities said IndiGo’s ASK to grow in line with the industry against higher earlier and sees a reduction in the gap in RASK-CASK between IndiGo against Air India/Vistara over FY20 till now.
Gangwal stepped down from InterGlobe Aviation’s board in February 2022 and announced plans to dilute his family’s stake in a phased manner.
Shares of InterGlobe Aviation Ltd (IndiGo) will be in focus on Monday morning as the co-founder Rakesh Gangwal is said to be considering selling of up to 5.8 per cent stake in the airline for about Rs 6,600 at a floor price of Rs 2,925 per share, CNBC-TV18 reported. As per Moneycontrol, this was higher than a planned stake sale of 3.3 per cent earlier. Business Today could not independently verify the news report.
IndiGo shares closed at Rs 3,101.55 a piece on Thursday last week. The floor price of Rs 2,925 is a 5.69 per cent discount to the last closing price.
InCred Equities in a recent its recent high conviction stock ideas note suggested a 'reduce' on IndiGo. It said incremental groundings in Q4FY24 (35 planes; 5 per cent of industry fleet) would not impact tariff as IndiGo would lease more planes to meet its capacity target, and competitors are unscathed and their fleet is underutilised. It expects IndiGo’s entire fleet to be operational in FY26.
"This will increase the industry capacity by 14 per cent and dampen tariff. We factor Re0.11 RASK - CASK in FY26F (same as FY17-20 average). We have a REDUCE rating on the stock with a target price of Rs 2,000, valuing it at 8.5 times FY26 EV/EBITDAR against a median multiple of 8.8 times (Nov 2015 to now, excluding the Covid-19 pandemic period). We believe the slight discount is warranted as the time for resolution of grounded fleet is uncertain," it said.
InCred Equities said IndiGo’s ASK to grow in line with the industry against higher earlier and sees a reduction in the gap in RASK-CASK between IndiGo against Air India/Vistara over FY20 till now.
Gangwal stepped down from InterGlobe Aviation’s board in February 2022 and announced plans to dilute his family’s stake in a phased manner.