Indigo IPO

Expert voice over indigo ipo???

 

Everyone is against it. The airlines industry is a bad industry. On top, the IPO is at high price. Why you want to go for airline IPO when so many good stocks like JB Chem, Shilpa, Camlin are there with good prospects. Just start SIP in these stocks.

There is good report at MC on Indigo IPO

So, here are the 10 things an investor should look in IndiGo’s parent IPO

#1 InterGlobe Aviation has fixed price band for its initial share sale at Rs 700-765, through which it could raise up to Rs 3,268 crore. The initial public offer will open on October 27 and close on October 29, with the allotment for anchor investors scheduled for October 26. Promoter holds 94 percent, which will come down to 82 percent post IPO. Under the offer, InterGlobe will have fresh issue worth Rs 1,272.2 crore as well as an offer for sale of little over 2.61 crore shares. The price band has been fixed at Rs 700-765 per share having a face value of Rs 10 each.

#2 Proceeds from offer for sale (net of Issue related expenses incurred by the Selling Shareholders) will go to the selling shareholders. Proceeds from fresh issue will be used to: (a) Retire certain outstanding lease liabilities and consequent acquisition of aircraft- Rs 1,165.6 crore (b)Purchase of ground support equipment for airline operations. The company proposes to deploy an aggregate amount of Rs 33.4 crore towards purchase of certain ground support equipment for airline operations, such as ramp coaches, tractors, ground power units and push-backs. (c)General corporate purposes

#3 In April-June quarter, IndiGo posted a net profit of Rs 640.44 crore. During the same period, total revenues stood at Rs 4,317.19 crore. For the year ended March 2015, the carrier recorded a net profit of Rs 1,295.58 crore on revenues of Rs 14,309.14 crore. As of December 31, 2014, it had a total indebtedness of Rs 4,002.8 crore and Rs 2,474.6 crore of net debt (net of free cash of Rs 15,28.2 crore)

#4 Cause of worry, however, has been its networth slipping to negative. Its net worth fell to a negative Rs 139.39 crore at the end of June 2015. The company has attributed this to payment of interim dividend. Net worth of the company was Rs 426.22 crore as of March 31, 2015 . The company says this may make it difficult or expensive to obtain future financing or to meet liquidity needs.

#5 IndiGo has the lowest Cost per Available Seat Kilometres (CASK), commonly used measure of unit cost in the airline industry, according to a report by SAP. In India, jet fuel prices tend to be higher than many other countries due to higher taxation imposed by local governments, according to the SAP Report. As per the SAP report, IndiGo’s CASK excluding fuel cost reduces further to USD 2.51 on the exclusion of maintenance reserves.

#6 According to the DGCA, Indigo enjoyed 33. 8 percent market share of domestic passenger volume for fiscal 2015. As of April 2015, it has 96 aircrafts. Currently, it has an order book of 180 A320neo aircraft and expects to take delivery of 15 additional aircraft, including nine A320neos, by March 31, 2016. From fiscal 2010 to fiscal 2015, its domestic passenger volume increased at a CAGR of 29.3 percent from 6.6 million domestic passengers in fiscal 2010 to 23.7 million domestic passengers in fiscal 2015, according to the DGCA.

#7 Key risks to Indigo's growth include: a) inability to grow domestic networks and frequencies in a profitable manner b) inability to acquire additional licenses and traffic rights c) delay or inability to procure, flight slots on financially viable terms d) changes to cost structure e) greater exposure to exchange rate volatility

#8 Indigo has cautioned that on newly commenced routes, load factors and fares initially tend to be lower than those on established routes, resulting in initial losses.

#9 Failure to comply with covenants contained in aircraft and engine lease agreements or financing agreements could have a negative impact on IndiGo.

#10 Unlike most full-service carriers, Indigo does not offer a frequent flyer program, free lounges or include food and beverages in ticket price for non-corporate passengers. These items have helped to further reduce its cost base.

Read more at:https://www.moneycontrol.com/news/i...ndigo-ipo_3666561.html?utm_source=ref_article

 

Thank you mam

 

"mam" ????? Mr Beginner Be VERY CAREFUL WITH YOUR MONEY!

 

Sorry.... By mistake

 

No Problem. You are Welcome here. What stocks you have in portfolio. You have eye on any favourite stock?

 

Currently M having tata motors, adani power, adani enterprises, mrpl, power grid,trident, vakrangee,L&T,ambuja cement,biocon,techmahindra,hcl, sun pharma...... sth ind bank, axis bank

 

@Srouta Mukherjee "The airlines industry is a bad industry."
I don't believe it is bad industry, it is a complex industry to make money here is difficult due to which companies like air india and king fisher were making loss.

 

The worldover airlines dont make money......

 

Normally investers had not made money in airlines.But presently it is more a play on crude.Although I never invest in commodities and PSU ,but still if any body want to play crude oil marketing companies are better play on crude.I don't deny gains in Indigo and Cafe coffee day IPO on listing.But my views are they are highly priced IPO and I would not play these risky bets.One is loss making company and other net worth negative.I would like to find so many better bets in listing space with that money.

 

Rakesh Jhunjhunwala is said to have placed a sizeable bid in the initial public offer of InterGlobe Aviation, the operator of no-frills airline Indigo, on Thursday.

Read more at:
https://economictimes.indiatimes.co...ofinterest&utm_medium=text&utm_campaign=cppst

 

Hi Guys,
Most of us are negative on this forum abt Indigo, did you guys heard what the Badshah (Rakesh Jhunjhunwala) is telling about this if not then read this his answer on Udayan question :

Q: Aviation, I read that you picked up a stake in Jet Airways . That is a publically disclosed information but what makes you bullish about aviation as a space because that has not made money for investors for the last many years. Other than the price of oil what could be the driver?


A: Let me first make disclosure that I am interested in every stock that I talk about. I may buy it any time, I may sell it any time, I may contradict what I am saying. So, please be warned. What makes me very excited about aviation is and about Indigo in particular that 85-88 percent capacity utilisation, Air India's market share is shrinking every year. There are not many planes on order. Indigo is the lowest cost airline. Can you imagine he invested Rs 300 crore, he has taken away Rs 3,500 crore as dividend? The Return on Capital (RoC) is 300 percent. And if you just make his first quarter's earnings into four he will earn about just 640 multiplied by 4 is Rs 2,600 crore which is about Rs 80 per share. Rs 80 per share what price is it coming. At 765 it is coming at 10 times earnings and I am very bearish on oil prices. I don't see them going anywhere in 3-5 years. So, it is a leader, the industry - one large player is shrinking, others don't have money, he has got the largest planes on order, he is the lowest cost operator. It is a no brainer.

Read more at: https://www.moneycontrol.com/news/m...cal-money_4075341.html?utm_source=ref_article


As per him its available on 10 PE and we are talking that its very high valuation.

3500 cr rs of dividend and we are getting bothered abt -ve networth.

Sometime I am getting frustrated about understanding the basic of stock market investing.

The forum in which we are discussing is 'rakesh-jhunjhunwala.in' is his name itself so how we can differ so much from his point of view and the same financial data on which is betting is available publicly.

 

Very surprising. I thought Indigo would be dabba stock and did not apply but it has shot up and all other stocks has come down crashing

 

@ajay6uc good points!.

The entire analyst community was against the IPO for very valid reasons. Personally I thought it very highly priced, but ended up applying knowing that there was an opportunity to flip the stock post listing!. On a valuation basis, this will be the most expensive Aviation stock in the Asia Pac region. But then Indigo hit Rs 1000/- today!. I strongly believe these are not driven by fundamentals but a function of supply and demand.

The Guru says there is shortage of planes, someone elase says this sector is prone to competition and no one made money esp. in a complex market like India - A market which imports most of its ATF, Has high taxes, Airports are congested, operations costs are high and ticket prices are the lowest.

So you are operating in environments that have one of the highest costs (Read articles from CAPA - Center for Asia Pacific Aviation) and has the lowest yields in terms of price per seat or price per kms.

I guess - It all depends on the way we as investors look at it!... Again just my view.

 

Well said!

 

Your question is valid and if you go through my post I did not rule out listing gain but still mantain that present good days of airlines are on basis of lower crude and God blessing calm on terrorists activities.Not only continous lower crude prices have been priced in but also future trading gains of aeroplanes had also been priced in in addition to control over terror..Respected Jhunjhunwala also invested heavily in cafe coffee day.I dont know what Udayan Mukherjee discussed about that .But I don't have calibre and resources of RJ ,so please always take posts here as divergent views and take your right decision.

 

Hi All,

I think most of the time we get biased on some thing like in this case hated Aviation sector so ignored it completely. But someone who has vigilant eyes grab it and wait for the result then stock market rewards those type of person in long run. Hope all of us here can achieve it shortly with discussion and learning and create wealth.

 

100% Agreed. Now bias will be on other side. Everyone will rush to aviation stocks.

 

despite all the negatives, the informed money made its way to IndiGo and what makes you think that when they were profitable with crude at $100 they can't do any better with crude prices trending lower (at 6 year lows) and expected to remain subdued for a while

people were selling Jet Air & Spice Jet as multi-baggers because the IndiGo issue was fully priced and possible re-rating of the sector

it is all about your money, your conviction

disclosure : i've 30 shares from IPO, even had Jet Air from IPO which was sold a long time ago

 

Employees are insider,why their quota remained almost unsubscribe?Does stock market know the company better than employees?