India’s largest carrier, IndiGo, on Tuesday launched three-day IPO procedures in what had been billed as the biggest initial public offering on the Bombay Stock Exchange since December 2012 when telecom infrastructure provider Bharti Infratel went public. Non-institutional investors bid for 3,545 shares against the quota limit of up to 58,19,746 shares. At this price, the total amount is Rs 832.03 crore.
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As per the latest CAPA figures, IndiGo’s market share grew to 34 percent at the end of March from 12.5 percent five years ago, while second-largest carrier Jet Airways’ market share fell to 22.1 percent from 28.1 percent.
The issue comprises of fresh equity component of around Rs 1,272 crore, which will be used for retirement of debt and purchase of ground equipment.
With three promoters – Rakesh Gangwal, Shobha Gangwal and Chinkerpoo Family Trust – deciding to offload less number of shares in the company, the IPO size has come down to Rs 3,018 crore. For India, mobile data revenue stood at Rs 2,893 crore, up 60.3 per cent. This was led by a 27.2 per cent increase in data customer base and a 69.9 per cent rise in data traffic, the company said. Sources had earlier said the airline would sell shares worth up to $510 million.
Outlook and Valuation: At the upper end of the price band, Interglobe is valued at 2.1x EV/Sales and at a P/E of 21.3x (FY2015).
The InterGlobe IPO is being managed by Citigroup Global Markets, JP Morgan, Morgan Stanley, Barclays Bank, Kotak Mahindra Capital and UBS Securities.
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IndiGo has a fleet of 98 aircrafts and about 75 of them are operating on lease – a business model which has helped it lower costs.
