Foreign investors show interest in Indigo shares

Foreign investors show interest in Indigo shares
Highlights

InterGlobe Aviation Ltd, owner of Indian budget airline IndiGo, on Wednesday filled the order book for its up to 30.2 billion rupees ($464.3 million) initial public offering, which attracted strong demand from foreign investors.

Foreign investors show interest in Indigo shares

Mumbai: InterGlobe Aviation Ltd, owner of Indian budget airline IndiGo, on Wednesday filled the order book for its up to 30.2 billion rupees ($464.3 million) initial public offering, which attracted strong demand from foreign investors. InterGlobe had received orders for 46.7 million shares as of 5 pm (1130 GMT), or 1.55 times the 30.1 million shares on offer during a second day of bookbuilding, according to data from National Stock Exchange and BSE Ltd.

The owner of IndiGo is selling the shares at between 700 rupees to 765 rupees each. It will close its order book on Thursday. The IPO, potentially the largest in India since 2012, could give the company a market value of up to $4 billion, bigger than rivals Jet Airways (India) Ltd and SpiceJet Ltd, both of which have market capitalisations of well under $1 billion, according to Thomson Reuters data.

IndiGo, India's largest airline by passenger numbers, has consistently stayed profitable for the past seven years by keeping its costs and taxes low, while building a reputation for punctuality. Its stock market debut coincides with low prices for crude oil, one of budget airlines' biggest costs.

"Considering the global economic slowdown ... I feel oil may be subdued for two years. So that two years will be a golden period for the leader in the (aviation) industry," G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm said, referring to IndiGo's outlook.

Foreign institutional investors were by far the most active bidders, according to exchange data, bidding for a total of 42.7 million shares, or 5 times the 8.5 million shares available for all institutional investors. InterGlobe on Monday had already allocated 10.9 million shares to anchor investors, including Goldman Sachs, at 765 rupees each, the top end of the IPO indicative price range, raising $128 million.

InterGlobe's IPO is the second high profile listing in India this month after Coffee Day Enterprises, the operator of the Cafe Coffee Day chain, raised 11.5 billion rupees ahead of its market debut on Monday.
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