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IndiGo flies on stock market take-off

10 November, 2015

Shares of InterGlobe Aviation Ltd, which runs top Indian carrier IndiGo, made a flying start on their stock-market debut on Tuesday.

The shares listed at Rs 856, a premium of 12 per cent to their issue price on the Bombay Stock Exchange in a weak broader market. The shares rose further after listing to hit an intra-day high of Rs 898 and a low of Rs 848.1 before ending the day at Rs 878.45.

The airline, which raised about Rs 3,000 crore from its initial public offering, is now the country’s 58th largest company by market value.

The lift-off also had a temporary positive effect on the two other airline stocks. Shares of Jet Airways and SpiceJet moved up 2 per cent each in early morning trading but later crashed tracking overall bearish sentiments in the market. IndiGo is valued over four times the combined market capitalisation of Jet and SpiceJet.

InterGlobe had fixed the issue price at the upper end of the Rs 700-765 price band after its IPO was oversubscribed more than five times on the final day thanks to non-retail investors.

Qualified institutional buyers (QIBs) had bid for almost 18 times the issue reserved for them. The QIBs had led the show on the first day when the firm hit 87 per cent subscription and remained the driver of the issue on the second day, too.

Non-institutional investors, including high net-worth individuals and corporate investors, bid for three-and-a-half times their portion of the issue, after remaining on the sidelines for the first two days.

Retails investors, however, remained unmoved with just four-fifths of their portion covered at the end of the three-day issue.

Previously, the company raised Rs 832 crore (about $128 million) from a group of investors, including sovereign funds of Norway, Singapore and Kuwait, who came in as anchor investors.

Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund; Singapore’s GIC and Kuwait Investment Authority together put in Rs 113 crore ($17 million) as part of the amount IndiGo raised through anchor investors. GIC and the Norwegian fund are two of the most active sovereign funds in Indian public equities.

The issue, the largest in three years, brings a positive vibe for the stock market, which had previously seen another high-interest public issue see poor investor interest after listing. Coffee Day Enterprises Ltd, which runs India’s top coffee chain under the Cafe Coffee Day brand, lost its froth as the firm’s shares sank on their stock-market debut last week.


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IndiGo flies on stock market take-off

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