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.

Brokerage firms Anand Rathi and Angel Broking have recommended 'Subscribe' to IPO of Interglobe Aviation.

Commenting on the investment rationale, Anand Rathi said ''Indigo is India's largest airline by Available seat Km. (ASK) and passenger volumes, third largest by fleet and largest in terms of fleet order book. Moreover, it is also India's only profitable airline and has been like that for the past five years, in an industry plagued with high costs and taxes. In light of Indigo's market leadership position, cost competitiveness, and a low-cost carrier (LCC) business model along India's aviation potential makes Indigo one of the consistent performer & growing potential in this industry. On valuation front company is trading at 6.8xs EV/EBITDA and 1.6xs EV/Sales for FY16. Also on annualized basis Earning for FY16 comes around 10xs which is reasonable. Thus, this offer is worth considering for investment on a short and medium term basis. Hence, we recommend Subscribe to the issue.''

Meanwhile, Angel Broking said, ''At the upper end of the price band, Interglobe is valued at 2.1x EV/Sales and at a P/E of 21.3x (FY2015). The company is not comparable to domestic peers on P/E basis as most of them are loss making while the premium on EV/Sales basis is warranted due to Interglobe's superior operating performance and profitability.  We have compared Interglobe to its like to like international peer Ryanair, which trades at 3.2x EV/Sales and at a P/E multiple of 20.6x (FY2015). We believe that the valuation of Interglobe is justified, considering the opportunity present in the vastly underpenetrated Indian air travel market.

Interglobe is better placed than its peers to capture higher market share on the back of its proven Management track record, continuous fleet addition and with its sustainable profitable business model. Hence we recommend a ''Subscribe'' to the issue at the higher end of the price band.''

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