IndiGo prunes IPO size, confirms pricing


IndiGo Airline holding company, InterGlobe Aviations lowered its initial public issue (IPO) size to INR30 billion from earlier INR32 billion priced INR700-765 per share. One of the company promoters is going for decreasing Offer for Sale size from previous 26.1 million to current 23 million shares. This deduction comes into light on the first day of IPO roadshow. The three day IPO offer will open on October 27. The company is expecting to raise around INR9.5 billion in its pre-IPO placement on October 26 with minimum bid size of 15 shares.

The company plans to use IPO proceeds to retire outstanding lease liabilities, acquire new aircrafts, and purchase ground support equipment. The Offer for Sale comprises of shares from InterGlobe Enterprises, Rahul Bhatia, Rakesh Gangwal and Shobha Gangwal. Other promoters include The Chinkerpoo Family Trust, Asha Mukherjee and IGT-InterGlobe Technologies Philippines in the offer for sale.

Indigo Plane

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InterGlobe Aviation intends to pay off nearly one-third of its total debt from the proceeds which adds up to INR11 billion. Barclays Bank, Kotak Mahindra Capital Company and UBS Securities India are managing the issue.

The company was valued at INR265 billion which is nearly six times of Jet Airways and ten times of SpiceJet.

INR10.79 billion was given away as dividends in FY15 as per RHP and the company has been profitable for seven years out of nine years (except for FY2006/07 and 2007/08) of its existence owing to its low-cost model and no-frills approach. For FY2014/15, the carrier recorded a net profit of INR 12.95 billion on revenues of INR143 billion, though net worth skidded to a negative INR1.39 billion by the end of June 2015. IndiGo Airlines has market share of 36% and expects to grow beyond 50%. The airline is one of the two domestic carriers that make profit other than GoAir.

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IndiGo Airlines was founded by Rahul Bhatia and Rakesh Gangwal in 2006. India’s largest airline, InterGlobe’s public issue will be the largest since Bharti Infratel’s INR41 in 2012. It will also be first issue from aviation sector since Jet Airways’ INR19 billion 2005 and Deccan Aviation’s 2006 issue. IndiGo ordered the largest single order of Airbus aircraft for purchase of 250 Airbus A320 neo jets.

Indian markets are showing an optimistic trend regarding IPOs this year. There are public issues of companies like SH Kelkar, Alkem Laboratories, Essel Infra, Infibeam, Maini Precisions, GVR Infra Projects, Parag Milk Foods, GNA Axles, Sandhar Technologies, G R Infraprojects and Quick Heal waiting to mark their presence. We, at IPO Central will keep you updated for sure. Follow us via Twitter or Facebook for latest IPO happenings.


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