Indigo IPO subscribed 1.28 times on Day 2

The initial public offer (IPO) of InterGlobe Aviation, the holding company of the country's largest airline, IndiGo, received an overwhelming response from investors with the issue getting more than fully subscribed on the second day of the three-day public offer.

The Rs3,130 crore share offer, the largest in the country since 2012, values InterGlobe Aviation Ltd, owner of India's largest and most profitable airline IndiGo, at $4 billion.

The portion of shares set aside for qualified institutional buyers (QIBs) was subscribed 3.46 times on the second day of the sale, according to data updated by National Stock Exchange (NSE) at 1.12pm on Wednesday.

At 3.30 pm IST, the IPO received close to 38.6 million bids against 30 million shares on offer, taking the overall subscription to 1.28 times.

This means InterGlobe would raise Rs3,018 crore from the primary markets through the issue.

On Monday, InterGlobe finalized the allocation of 10.87 million equity shares at Rs765 per share, adding up to Rs832.03 crore, to anchor investors. The company had actually raised Rs832 crore from anchor investors through a pre-IPO placement.

The company allotted shares to 40 anchor investors, including the Singapore government, Goldman Sachs India Fund, Credit Suisse Singapore and Sundaram Mutual Fund, at a price of Rs765 apiece.

IndiGo, the only domestic airline to be consistently profitable since 2009, has fixed a price band of Rs700-765 for the IPO that will close on 29 October.

Most of the bids came in at the upper end of the price band, according to market data.

However, only 5 per cent of the shares set aside for individual retail investors and 2 per cent of those set aside for employees were subscribed, according to the data.

The company had pared the initial share sale size to a little over Rs3,000 crore last week, after of the promoters decided to sell less number of shares than proposed earlier.

The offer comprises fresh issue of shares worth Rs1,272.2 crore and the revised offer for sale (OFS) size that would be about Rs1,746 crore. Together, the share sale can rake in up to Rs3,018.2 crore.

Barclays Bank plc, Kotak Mahindra Capital Company Limited and UBS Securities India are managing the issue.

IndiGo has a fleet of 98 aircraft and about 75 of them are on operating lease – a business model which has helped it lower costs.

InterGlobe's IPO is the biggest primary market offering since Bharti Infratel's Rs4,100 crore-plus public issue in December 2012, data released by Prime Database showed.