Interglobe Aviation, India's largest passenger airline, will launch 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. Company is continuously focusing on maintaining their cost advantage and a high frequency of flights while striving to fulfill their simple brand message of providing ''low fares, on-time flights and a hassle-free experience'' to their passengers.
AnandRathi Research has recommended 'Subscribe' to IPO of Interglobe Aviation. Commenting on the investment rationale, the stock broker 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.''
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