IndiGo IPO subscribed 80% on first day

Gets bids for 2.39 crore shares

The initial public offering (IPO) of InterGlobe Aviation, the promoter of low-cost carrier IndiGo, received good response on the first day, with the qualified institutional investor (QIB) quota getting oversubscribed.

The IPO received bids for a total of 2.39 crore shares on the first day of bidding for the IPO today, 27 October 2015, as per data from the National Stock Exchange (NSE) website at 16:00 IST. The IPO was subscribed 0.80 times, or 80%. The bidding for the IPO concludes on 29 October 2015.

The aviation company saw QIBs bidding for 2.37 crore shares, around 2.79 times the number of shares on offer in this segment, which is 85.22 lakh shares. All the bids came in from foreign institutional investors (FIIs), as domestic institutions had not made any bid till 17:00 IST, NSE data showed.

Non-institutional investors bid for 40,980 shares against the quota limit of up to 58.19 lakh shares. Retail investors, on the other hand, bid for 4.03 lakh shares against 1.35 crore shares set aside for the category.

InterGlobe Aviation raised Rs 832 crore by selling 1.08 crore shares to a total of 43 anchor investors ahead of the IPO. The shares were allotted to the anchor investors at Rs 765 per share, the top end of the Rs 700-765 per share price band for the IPO.

The IPO comprises of fresh issue of equity shares aggregating Rs 1272.20 crore and offer for sale of up to 2.28 crore shares by existing shareholders of the company.

InterGlobe Aviation is promoted by Mr. Rahul Bhatia, Mr. Rakesh Gangwal, InterGlobe Enterprises and Acquire Services. Promoters are selling a part of their holding through the IPO. From non-promoters, a total of 7 entities are selling shares through the IPO.

The company intends to use the proceeds of the fresh issue of shares primarily to retire its aircraft lease obligations. It will utilize Rs 1165.66 crore to retire some of the exiting aircraft lease obligations. The company will utilize Rs 34.25 crore for purchase of ground support equipment for its airline operations and the remaining amount for general corporate purposes.

IndiGo is India's largest passenger airline with a 33.9% and 37.4% market share of domestic passenger volume for the year ended 31 March 2015 and the five months ended 31 August 2015, respectively, according to the DGCA. IndiGo operates as a low-cost carrier or LCC business model and focuses primarily on the domestic Indian air travel market.

InterGlobe Aviation reported net profit of Rs 640.43 crore on revenue from operations of Rs 4211.54 crore in Q1 June 2015. Net profit stood at Rs 1295.58 crore on revenue from operations of Rs 13925.33 crore for the year ended 31 March 2015 (FY 2015).

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