The much-awaited initial public offering (IPO) of InterGlobe Aviation -- the company that operates India’s low-cost airline IndiGo -- hit the primary market Tuesday. The IPO, the biggest in the country in nearly three years, will close Thursday and aims to raise over $460 million.
According to data released by the National Stock Exchange of India, the IPO had received bids for over 23 million shares against the total issue size of over 30 million shares by 5 a.m. EDT. The portion reserved for qualified institutional buyers was oversubscribed nearly three times.
Shares are being sold at between 700 rupees ($11) and 765 rupees ($11.8), with the incoming money meant to be spent on expanding operations and trimming debt.
“An IPO is a milestone ... as a company, it is something you want to grow up to be,” IndiGo President Aditya Ghosh told local news network NDTV. “Being a listed company also makes sure we don't get complacent.”
Over the last seven years, IndiGo -- which is currently India’s largest airline by passenger numbers -- has been the only consistently profitable airline in the country. For the quarter ended June 30, InterGlobe Aviation posted a quarterly profit of $98 million on revenue of $660 billion.
IndiGo, which started operations in 2006, also has one of the country’s biggest fleets, with 97 planes. Analysts estimate that IndiGo keeps costs low by buying just one type of aircraft from one supplier -- Airbus -- and selling and leasing back planes. A recent drop in fuel costs has also helped it boost profits.
The $460 million IPO is expected to give IndiGo a market value of over $4 billion.