Interglobe Aviation or Indigo has made a strong debut on the bourses today. As against the offer price of Rs.765, the stock opened at Rs.856, went on to an intra day high of Rs.898. It is currently quoted at Rs.883, up 15.5%.

The company’s IPO ended on 29^th of Oct. The IPO was subscribed 6.15 times and it allotted shares at the upper price band of Rs.700-765.

Operating Indigo Airlines, Interglobe Aviation is 94% promoter-owned, with balance being employee shareholding. It operates 97 aircrafts (75 on operating lease, 22 on finance lease) with an average of 603 flights per day. Fresh issue proceeds will go to retire the outstanding lease liabilities of 7 aircrafts for Rs. 1,166 crore and purchase of ground support equipment of paltry Rs. 34 crore.

As we had analysed in our New Issue Analysis section on the website, this is not an investment grade stock given the ad-hoc fiscal ways it has been following. We do not yet see value in the stock as an invetsment.