Maybe valued at 25,200 crores by the end of the fundraising act
India’s biggest airline company in terms of passengers carried, IndiGo is eyeing a 10% stock sale that may raise them a valuation of $400 million. This business masterstroke if completed by the aviation firm will enhance their value in the sector by almost 8 times compared to other contenders within the industry. At a while when people have had nightmare experiences dealing with airline companies in the sickened Indian aviation industry this business plan of accumulating additional funds through the Initial public offering (IPO) by IndiGo is applauded by many.
A planned take-off:
The talks regarding moving an IPO was around since mid-2014 yet the airline seemed to have waited for the right time in order to play it to the optimum outcome. According to the sources, now is the time and the company is almost completed with the formalities for the IPO and may apply within the coming 60 days period. The airline under the holdings of the InterGlobe Enterprises had posted a total earnings of 50 crores INR for the financial year 2014 and is estimated to clock a valuation of 25,200 crores INR once the IPO is done. The company sources added that the Securities and Exchange Board of India (SEBI) normally consumes six-eight months with the procedures; hence IndiGo is likely to get a push during the start of 2016.
IndiGo’s profit before taxes for the year ended 31st March, 2015 has shot up by 3 times
The company has a squadron of 97 Airbus-320-200s and has already ordered for an additional fleet of 180 A320 neo’s (new engine options. The company has also witnessed an upswing in its traffic both domestic and international flyers by 13.9% and 9% respectively. Moreover, the airliner seems to have a great backup as the firm has declared that it has a cash reserve of more than $1 billion in its bank accounts.
According to the stats from Director General of Civil Aviation (DGCA) upto May-2015, the company had a 39% market share whereas Jet Airways along with its auxiliary concern JetLite had a 21.5% and SpiceJet which ended with a profitable quarter making 22.52 crores INR after a long loss making journey for 7 incessant quarters, posted a 12% share in the industry.
Meanwhile, consultant CAPA India has projected IndiGo’s 2015 profit valuation at a whopping $175 million; that’s around 1,111.6 crores INR. One has to accept that the IPO just looks like a small start to a high-flying journey for IndiGo in the Indian aviation industry.