Mumbai: India’s leading low-fare carrier IndiGo, run by InterGlobe Aviation Pvt. Ltd, is planning to raise $500 million (Rs2,215 crore) through its initial public offering (IPO), the highest ever for an Indian airline, and this may lead to a re-rating of airline stocks, said sector analysts.
Shares of Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd are traded on Indian exchanges.
The IPO is scheduled for the last quarter of the current fiscal ending March 2011, said two persons close to the development. One of them is an airline executive and the other is an investment banker.
IndiGo has hired five investment bankers, including JM Financial Ltd, Credit Suisse Group AG, Citigroup Inc., UBS AG and Morgan Stanley for the proposed IPO.
Ahead of the IPO, IndiGo is looking at an equity placement that could result in dilution of promoters’ stake of as much as 25%. Last week, the company conducted investor roadshows in Hong Kong and Singapore for the equity placement.
“The exact details of the proposed IPO are yet to be finalized but IndiGo is planning to raise 10 times its earnings,” said one of the persons mentioned earlier. He added that the low-fare airline, which held a 16.4% market share in August through 188 flights across 22 destinations, will raise more than the Rs1,899 crore that rival and full-service airline operator Jet Airways raised five years ago.
Aditya Ghosh, president of IndiGo, did not return calls made to his mobile phone nor did he reply to text messages.
“The IPO is expected to leverage the success story of IndiGo,” said Kapil Kaul, India chief of Sydney-based aviation consultancy Centre for Asia Pacific Aviation, adding that the airline’s valuation would set the benchmark for industry stocks.
“This could be significantly higher than low-fare airline stock and even higher than full-service carriers such as Jet Airways,” he added.
A successful and large IPO by IndiGo could put pressure on other stocks of airline companies such as Jet Airways and Kingfisher Airlines that are also competing to raise funds from the market.
On Monday, airline stocks took a beating, with all three listed airlines losing value even as the Bombay Stock Exchange’s benchmark index, the Sensex, rose 0.15% to close at 20,475.73 points.
SpiceJet slipped 3.25% to close at `74.40, Jet Airways—India’s largest carrier by traffic—fell 1.26% to `806.15, and Kingfisher fell 1.75% to `73.05.
Since January, Jet Airways has risen 45.74%, SpiceJet 31.1% and Kingfisher 15.59%.
Read more: http://www.livemint.com/2010/10/04234454/IndiGo8217s-big-IPO-may-lea.html
Showing posts with label Industry News. Show all posts
Showing posts with label Industry News. Show all posts
Tuesday, October 5, 2010
Airline industry's second quarter net profit $4.4 bn: IATA
NEW DELHI: The International Air Transport Association (IATA) Monday reported a net profit of $4.4. billion for the international airlines sector and outlined a positive growth trajectory for the industry.
"With more airlines reporting second quarter results, the total is now up to US$4.4 billion, following US$1.9 billion losses in first quarter (Q1)," the industry body said in a statement.
According to it, the first and second quarter net profits were US$5 billion better than the previous year and it expects the third quarter would be the most profitable one for the industry.
It further said that it expected the industry to make a profit of $8.9 billion in 2010, compared to a loss of $9.9 billion loss in 2009.
IATA, which represents 230 airlines comprising 93 per cent of scheduled international air traffic, has revised its previous estimate. In June, IATA had said it was expecting $2.5 billion profit.
The improved outlook for 2010 is being driven by a combination of factors. On the revenue side increasing demand and disciplined capacity management are leading to sharply stronger yields pushing revenues higher. At the same time, costs remain relatively stable.
Earlier, the association had said that the Indian carriers will pare their losses this year to $400 million, from the $1.7 billion in 2009, as passenger and cargo traffic increase and fuel prices remain stable.
Source: The Economic Times
"With more airlines reporting second quarter results, the total is now up to US$4.4 billion, following US$1.9 billion losses in first quarter (Q1)," the industry body said in a statement.
According to it, the first and second quarter net profits were US$5 billion better than the previous year and it expects the third quarter would be the most profitable one for the industry.
It further said that it expected the industry to make a profit of $8.9 billion in 2010, compared to a loss of $9.9 billion loss in 2009.
IATA, which represents 230 airlines comprising 93 per cent of scheduled international air traffic, has revised its previous estimate. In June, IATA had said it was expecting $2.5 billion profit.
The improved outlook for 2010 is being driven by a combination of factors. On the revenue side increasing demand and disciplined capacity management are leading to sharply stronger yields pushing revenues higher. At the same time, costs remain relatively stable.
Earlier, the association had said that the Indian carriers will pare their losses this year to $400 million, from the $1.7 billion in 2009, as passenger and cargo traffic increase and fuel prices remain stable.
Source: The Economic Times
Wednesday, September 29, 2010
Air-Traffic Growth Slows, Suggesting Peak Has Passed : IATA
Air-traffic growth slowed for a second month in August, suggesting that a recovery in demand for flights may have peaked, the International Air Transport Association said today.
The gain in passenger traffic eased to 6.4 percent compared with a year earlier, down from 9.5 percent in July and a high of 11.9 percent in June. The figure matches the lowest growth rate this year in January, with the exception of April, when a volcanic ash cloud from Iceland closed European airports.
IATA more than tripled its forecast for full-year airline earnings to $8.9 billion on Sept. 21, citing the strength of a recovery in demand, while cautioning that profit would fall back in 2011 as cuts to state spending sap consumer confidence.
“The rapid improvements that we saw earlier this year are behind us,” IATA Chief Executive Officer Giovanni Bisignani said in today’s statement, predicting “a tougher end to 2010 as government stimulus monies run out.”
Traffic grew fastest in the Middle East in August, rising 12 percent, with Europe expanding 5 percent, North America 5.3 percent and the Asian-Pacific region 6.2 percent, IATA said.
Cargo-traffic growth may have peaked in May, when it increased 34 percent, today’s figures suggest, with August’s advance of almost 20 percent the lowest increase since then.
“The bounce from restocking is over,” Bisignani said. “We do not yet see the strong consumer confidence needed to sustain the expansion with spending.”
Source: Bloomberg
The gain in passenger traffic eased to 6.4 percent compared with a year earlier, down from 9.5 percent in July and a high of 11.9 percent in June. The figure matches the lowest growth rate this year in January, with the exception of April, when a volcanic ash cloud from Iceland closed European airports.
IATA more than tripled its forecast for full-year airline earnings to $8.9 billion on Sept. 21, citing the strength of a recovery in demand, while cautioning that profit would fall back in 2011 as cuts to state spending sap consumer confidence.
“The rapid improvements that we saw earlier this year are behind us,” IATA Chief Executive Officer Giovanni Bisignani said in today’s statement, predicting “a tougher end to 2010 as government stimulus monies run out.”
Traffic grew fastest in the Middle East in August, rising 12 percent, with Europe expanding 5 percent, North America 5.3 percent and the Asian-Pacific region 6.2 percent, IATA said.
Cargo-traffic growth may have peaked in May, when it increased 34 percent, today’s figures suggest, with August’s advance of almost 20 percent the lowest increase since then.
“The bounce from restocking is over,” Bisignani said. “We do not yet see the strong consumer confidence needed to sustain the expansion with spending.”
Source: Bloomberg
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