India's leading airline is celebrating a 'blockbuster takeoff' as shares surged high above their listing price. The IPO is aimed at solidifying IndiGo's grip on one of the world's fastest growing aviation markets.
IndiGo got off to a flying start as India's largest carrier made its market debut on Tuesday, with shares in its parent company InterGlobe Aviation surging as high as 18 percent above their listing price.
Shares opened at 856 rupees (12 euros, $12.9) on the Bombay Stock Exchange, then soared to 887.5 rupees around noon, up from an issue price of 765 rupees.
IndiGo president Aditya Ghosh said the strong listing was a result of years of hard work, but he had not expected such a "blockbuster takeoff," according to NDTV news channel.
Recipe for success
The company's simple recipe - a low cost base, minimal debt and punctual flights - has managed to win over investors at a time when much of the industry is hurting. Fierce competition coupled with high local fuel taxes and infrastructure costs have set India's airlines back more than 9 billion euros in the past six years. IndiGo is the only carrier that has been consistently profitable. Its no-frills approach has made it India's biggest by marketshare at nearly 34 percent.
As a result, InterGlobe Aviation was able to raise 30.1 billion rupees last month in what marked the first initial public offering by an Indian airline since 2006, and the country's biggest in around three years.
The money, the owners said, would be used for paying for the 250 Airbus planes they ordered earlier this year as well as trimming debt.
The country's civil aviation sector has seen massive expansion over the past decade and its market has the potential to become the biggest globally by 2030, according to consultancy KPMG.
pad/hg (AFP, dpa, Reuters)