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IndiGo IPO covered 87% on day 1

27 October, 2015

Sovereign funds of Norway, Singapore and Kuwait are among the anchor investors who put money in InterGlobe Aviation Ltd, which runs India’s top air carrier IndiGo, on the eve of the firm opening its maiden public issue.

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 Rs 832 crore that IndiGo raised through anchor investors. GIC and the Norwegian fund are two of the most active sovereign funds in Indian public equities.

Several other asset management firms also participated in the anchor allotment including funds managed by Fidelity, Blackrock, Acacia, HDFC and Merrill Lynch.

The anchor investors picked up shares at the upper end of the Rs 700-765 price band for the IPO, which opened for the public on Tuesday.

One-third of the IPO was covered in the first two hours led by oversubscription by institutional investors.

Meanwhile, the company opened its IPO in a price band of Rs 700-765 per equity share. The issue was covered 87 per cent at the end of day one led by qualified institutional buyers (QIBs).

Stock exchange data shows that QIBs bid for about 3 times of their portion of the issue. Non institutional investors and retail investors almost stayed away on the first day and just subscribed 2 per cent and 5.2 per cent, respectively, of the portion reserved for them. The issue would close on October 29, 2015.

The overall issue is worth Rs 3,130 crore, making it one of the largest in several years. Close to two-thirds of the total would go to the selling shareholders, mostly the promoters of the firm.

The company would be worth many times the market cap of the two public listed airlines—Jet Airways and SpiceJet. The two airlines have a combined market value of about Rs 7,300 crore ($1.1 billion).

Founded around a decade ago by travel industry entrepreneur Rahul Bhatia (now 55) and aviation industry veteran Rakesh Gangwal (now 61), who also served as CEO of US Airways, IndiGo has expanded aggressively.

It trumped both legacy carriers Indian Airlines (now Air India) and Jet Airways as well as low-cost airlines that started almost at the same time to emerge as the country’s top carrier.

Click here for a peek at the company and its IPO plan.


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IndiGo IPO covered 87% on day 1

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