IndiGo IPO – Flying High, Wide and Handsome

  • Date Oct 27th 2015
  • IPO Period: 27-29th Oct 2015 
  • Price range: Rs. 700-765
  • Industry – Airlines. Large Cap – 27,600 crores mkt cap
  • Advice: Good offering with medium risks. BUY with a minimum 1 year horizon

Overview:

  • IndiGo is the market leader in Indian aviation with a low cost carrier model. The 97 aircraft cover 647 flights daily to 38 destinations including 5 abroad.
  • The Income, EBITDA and profits have grown 35.8%, 30.6% and 22.0% CAGR over 5 years.
  • It has a 5 year record of profitable operations, and was free cash flow positive in 3 of the last 6 years. The fall in crude prices will be a windfall for IndiGo and lower costs.
  • The airline sector is known to destroy value globally, due to high costs and cyclical demand. But IndiGo is an outlier and exception in the industry.
  • A sharp rise in fuel prices remains the primary risk to profitability.
  • Opinion: Buy with a minimum 1 year horizon

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Here is a note on the Interglobe Aviation Ltd (IndiGo) IPO.

JainMatrix Investments_IndiGo Airlines IPO_Oct2015

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Disclaimer

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. JM has no known financial interests in IndiGo or Interglobe Aviation or any related firm. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Punit Jain has applied for certification under SEBI (Research Analysts) Regulations, 2014. Any questions should be sent to the director of JainMatrix Investments at punit.jain@jainmatrix.com

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