India's biggest airline according to market share is aiming at a valuation of around $4 billion (Rs 26,000 crore) through the initial public offer (IPO), which is India's biggest since 2012.
10 things to know about IndiGo IPO:
1) IndiGo shares, with a face value of Rs 10, can be bought in a price band of Rs 700 to Rs 765 starting today. Shares can be bought in multiples of 15. The IPO will close for subscription on October 29,2015
2) The IndiGo IPO comprises fresh issue of shares worth Rs 1,270 crore. Promoters and non-promoters are selling shares worth about Rs 1,750 crore. Together, the share sale can rake in up to Rs 3,000 crore. Post issue, the promoter holding is expected to come down to 85 per cent from 93 per cent currently.
3) Ahead of the IPO, investment arms of foreign firms including Goldman Sachs, Fidelity, BlackRock, etc. bought IndiGo shares reserved for cornerstone investors at Rs 765 each, the top end of the IPO indicative price range, helping the airline to raise Rs 830 crore and flagging strong investor appetite for the offering.
4)IndiGo has a net debt of Rs 3,912 crore, all of which is related to aircraft purchases, according to Mr Ghosh. IndiGo plans to use the proceeds to retire Rs 1,166 crore of debt, while the remaining amount will be used to fuel expansion, the company said. IndiGo has 430 aircraft on order from Airbus
5)There was some controversy ahead of the IPO as InterGlobe's net worth (total assets minus total liabilities of a company) slipped to a negative Rs 139 crore at the end of June 2015. The company, however, clarified that the airline's net worth is back in positive in the September quarter.
6) IndiGo has been the only consistently profitable airline in the country for the last seven years. Industry experts say the focus on cost by IndiGo's management team has helped the airline to avoid the amount of debt that is weighing down the likes of Jet Airways and Air India.
7) IndiGo, which started flying in 2006, has risen rapidly to command almost 40 per cent market share in the domestic market. It also has one of the country's biggest fleets - 97 aircraft at present - allowing it to fly more frequently than other carriers. The average age of its fleet is around four years, which saves fuel costs.
8) IndiGo 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, experts have said. It has also benefited from its track record on punctuality, while falls in fuel costs have helped to boost revenue.
9) IndiGo was set up in 2006 by businessman Rahul Bhatia and Rakesh Gangwal, a former CEO for US Airways Group
10)"An IPO or listing gives you one more stamp of approval because with IndiGo one thing I have got used to is people doubting what we are doing... An IPO is a milestone...as a company, it is something you want to grow up to be... Being a listed company also makes sure we don't get complacent,” said OndiGo President Aditya Ghosh
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