Despite concerns, IndiGo IPO subscribed 80% on Day 1

InterGlobe Aviation IPO, also referred popularly as IndiGo IPO, opened for subscription today and investors demonstrated no restraint in demonstrating their preference for the public offer. Investors entered bids for over 80% of the shares available for sale in the IPO on the first day. The shares are offered in a price band of INR700-765 per share. The company, parent of low-cost carrier IndiGo, had lowered its share sale from INR32 billion to INR30 billion and then again by one million shares before raising INR8.32 billion from anchor investors yesterday.

Indigo Plane

Qualified Institutional Buyer (QIB) quota received 23.7 million bids and was oversubscribed 1.79 times. However, Retail and Non Institutional Investor (NII) quota saw slow demand of 0.03% and 0.01% respectively. Overall, subscription figures show that there is good demand for the IndiGo IPO, although concerns were raised over the interim dividend payment which left the company’s net worth in negative territory.

InterGlobe Aviation IPO Bidding (as on 27 October 2015)
S. No. Category No. of shares offered No. of shares bid for Subscription No. of times
1 Qualified Institutional Buyers (QIBs) 8,522,935 23,762,865 2.79
2 Non Institutional Investors 5,819,746 40,980 0.01
3 Retail Individual Investors (RIIs) 13,579,407 403,155 0.03
4 Employees 2,200,000 34,380 0.02
Total 30,122,088 24,241,390 0.80

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In a pre-issue share sale, InterGlobe Avaiation had allotted 10.88 million shares to its 43 anchor investors, including the Singapore government-owned GIC, Goldman Sachs, Merrill Lynch, Ruane, Cunniff & Goldfarb, HDFC AMC, Sundaram Mutual Fund, DSP Blackrock Mutual Fund and Fidelity Investments along with raising INR8.32 billion in the process.

The issue comprises of fresh issue of INR12.72 billion and maximum portion from proceeds of the sale would be used for paying its colossal debt which amount to INR39.12 billion. IPO proceeds will also be used to acquire new aircrafts and purchase ground support equipment.

Founded by Rahul Bhatia and Rakesh Gangwal in 2006, IndiGo is India’s largest aviation company with market share of 35.3%. InterGlobe’s net profit rose from INR4.73 billion in FY 2014 to INR13.04 billion in FY 2015 and it plans to expand its fleet size to 111 and 137 by FY 2016 and FY 2018 respectively.

IndiGo airhostess

Read Also: InterGlobe Aviation IPO Review: The emperor has no clothes

The issue is managed by Citigroup Global Markets, JP Morgan, Morgan Stanley, Barclays Bank, Kotak Mahindra Capital and UBS Securities. The three-day offer is to conclude on October 29.

InterGlobe’s public issue is the largest since Bharti Infratel’s INR41 billion in 2012. Overall, 16 companies launched their public issues this year and raked in a total of INR75 billion. India’s fragrance and flavor company S H Kelkar is to launch its IPO on 28 October.

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Vipin Mathur

By working in multiple cultures and segments of various organizations, Vipin has earned 15 years of experience in managing and organizing different operations. Most recently, he is associated with IPO Central as CEO. At IPO Central, he plays a leading role in management and operational practices. He also guides authors and researchers about the latest trends and news of upcoming IPOs.

One thought on “Despite concerns, IndiGo IPO subscribed 80% on Day 1

  • November 5, 2015 at 5:51 PM

    When indigo iPo. Will open


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