IndiGo IPO hits market: All you need to know
October 27, 2015
InterGlobe Aviation, which operates the country's most profitable airline IndiGo, hit the capital markets with its Initial Public Offering (IPO) on Tuesday. The issue will close on Thursday.
The company had on Monday raised Rs 832 crore from anchor investors by allotting shares at the upper price band of Rs 765 apiece.
Here are 10 things you need to know:
- The promoters will sell 22.82 million equity shares via the IPO to raise around Rs 3,018 crore, the biggest in nearly three years. The airline has fixed a price band of Rs 700-765 per share for the public issue.
- The company has reduced its initial share sale size to a little over Rs 3,000 crore last week, with three of the promoters deciding to sell less number of shares than proposed earlier.
- The offer comprises fresh issue of shares worth Rs 1,272.2 crore and the revised Offer for Sale (OFS) size that would be about Rs 1,746 crore. Together, the share sale can rake in up to Rs 3,018.2 crore.
- InterGlobe Aviation has allotted little over 1.08 crore shares to more than
40 anchor investors, including the Singapore government, Monetary
Authority of Singapore, Goldman Sachs India Fund, Abu Dhabi Investment
Council - Tallyfish, Indus India Fund (Mauritius) Ltd, Kuwait Investment
Authority Fund 224, Credit Suisse Singapore Ltd and Sundaram Mutual
- IndiGo, India's largest airline by passenger numbers, is
the only consistently profitable local carrier for the past seven years,
according to consultancy Centre for Aviation (CAPA).
say IndiGo makes and attractive bet for investors with its success in
dodging the high operating costs and taxes that have grounded
debt-ridden Kingfisher Airlines and forced the bail out of SpiceJet.
IndiGo's passenger numbers are growing at up to 18 per cent a year.
keeps costs low by buying just one type of aircraft from one supplier -
Airbus - as well as selling and leasing back planes, and keeping
maintenance costs low.
- IndiGo's rivals include Jet Airways, SpiceJet and AirAsia India.
- The much-talked about IPO recently stuck in controversy as analysts and investors questioned rather hefty dividends that have been paid out to promoters in recent years. Analysts believe IndiGo's negative net worth of Rs 1.39 billion ($21.41 million) as of June 30 may have been caused by rich dividends paid in that period.
- "We believe that the valuation of Interglobe is justified,
considering the opportunity present in the vastly underpenetrated Indian
air travel market. Interglobe is better placed than its peers to
capture higher market share on the back of its proven Management track
record, continuous fleet addition and with its sustainable profitable
business model. Hence we recommend a "Subscribe" to the issue at the
higher end of the price band," said broking firm Angel Broking in a
(With inputs from agencies)