Interglobe Aviation, India's largest passenger airline, launched initial public offer (IPO) for subscription to public on Tuesday, Oct. 27, 2015. The price band has been fixed between Rs 700 to Rs 765 a share. The issue will close on Oct. 29, 2015.

The company operates on a low-cost carrier (LCC) business model and focuses primarily on the domestic Indian air travel market. Indigo is the seventh largest low-cost carrier globally in terms of seat capacity in fiscal 2015, according to CAPA report.

Way2Wealth Research has recommended 'Avoid' to IPO of Interglobe Aviation. Commenting on the investment rationale, the stock broker said, ''At the offer price bands, the issue is available at P/E of 19.5x - 21.3x its FY15 EPS of ~Rs 36. The financials are not comparable to its listed peers as it is the only profit making company compared to losses in Jet Airways and SpiceJet.

However, most of the positives like recent fleet addition, lower crude oil prices, expected strong growth in under penetrated market and profitable business seem to be already priced in the offer price leaving very little for investors.

The company has a negative net worth of Rs 1.39 billion as at Jun. 30, 2015 as it offered dividend to promoters during FY15 which was 3x higher than FY14. Hence we recommend investors to AVOID this issue.''

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