IndiGo is ready for an IPO takeoff

India’s fastest growing and biggest low cost domestic airline IndiGo, founded by Rahul Bhatia, a United States based-NRI in 2006, is all set to launch its IPO. IndiGo is one of the fastest growing low cost carriers in the world. With its fleet of 79 new Airbus A320 aircraft, the airline offers 504 daily flights connecting to 36 destinations. IndiGo has a market share of 32% (approximately).

IndiGo is estimated to be worth about $2 billion, with the company stating that its revenue is roughly around $1.6 billion with an operating income as $170 million in 2013, making one of the only profitable low cost airlines in India. The primary hub of IndiGo airlines is Indira Gandhi International Airport, Delhi. IndiGo also provides services to few of the international cities such as Bangkok, Singapore, Dubai etc. IndiGo is well known to manage its ground operations, maintenance repair, spare parts supply chain and its flight scheduling with a very streamlined process mind set, enabling them to be operationally profitable in this hypercompetitive market.

IndiGo started its operation under InterGlobe Enterprises, which was established in 1989 with headquarters in Gurgaon, India. InterGlobe Enterprises has been in the aviation technology space providing IT & BPO solutions, hotel development and management, hotels and much more.

Rahul Bhatia, Managing Director at IndiGo holds a degree in Electrical Engineering from the University of Waterloo in Ontario, Canada. He was awarded the Ernst and Young Entrepreneur of the Year in 2011 for the creation of India’s biggest and my various measures, successful low-cost carrier airline.

The Indian aviation sector, having seen regular operational losses (Jet Airways, SpiceJet, GoAir) and even shutdowns (Kingfisher) is about to finally witness a success story with a big IPO. SEBI allows a company to file for an IPO only after many sequential profitable quarters. This IPO filing news has attracted top notch investment banks such as Merill Lynch, Morgan Stanley, Citigroup, JP Morgan & Chase Co, Barclays, UBS, BNP Paribas and Credit Suisse (which already has private equity minority stakes in InterGlobe Technology Quotient). The bids by the banks for the $350-$400 million IPO were presented on Monday and Tuesday in Paris and management of IndiGo is keen to list it by the end of current fiscal year as per sources.

Aviation experts predict that the offer is likely to be preceded by a huge order of 200-250 aircraft in July 2014 to meets its equipment requirements post 2025. In the recent past, global aviation industry has witnessed successful IPO’s of various low cost carriers such as of AirAsia, EasyJet and Jet Airways in India. Even Kingfisher Airlines planned to go for an IPO but failed due to its unsuccessful fundraising.

Whom do you think will be the next in line for an IPO? Let us know in the comments below.