InterGlobe Aviation’s Indigo Soars to Record High, Crossing Rs 1.01 Lakh Crore Market Cap

InterGlobe Aviation, the parent company of Budget Carrier Indigo, achieved a significant milestone by becoming the first Indian airline to cross the market capitalization of ₹1.01 lakh crores. Shares of the company are at a record high with an increase of 29 percent so far this year, at INR 2,634.25 on BSE. This rise in value represents a rise of nearly 38 percent since March 28.

Indigo’s recent stock performance can be attributed to several factors. First, investors showed optimism following the airline’s growing market share Go Air declares bankruptcy. In addition, advertising Indigo’s huge order for 500 Airbus A320 family aircraftIt attracted him, the largest single-plane order ever placed by an airline with Airbus Great interest from investors. This demand surpasses the previous record set by Tata-owned Air India, which It ordered 470 aircraft in March.

Of the listed Indian airlines, only Indigo, SpiceJet and the currently defunct Jet Airways are trading. SpiceJet currently has a market capitalization of Rs.1,646.05 crore while Jet Airways, despite its defunct status for more than four years, still maintains a market capitalization of Rs.552 crore.

Global Elite Club

According to reports, Indigo’s market capitalization now also ranks it among the top 10 listed airlines globally, taking the 10th spot. The world’s largest airline by value is Delta Air Lines, with a market capitalization of $29.62 billion, followed by Southwest Airlines and Ryanair Holdings plc. United Airlines Holdings PLC and Air China took fourth and fifth place, respectively, followed by Singapore Airlines, China Southern Airlines, China Eastern Airlines and Deutsche Lufthansa.

Also read: IndiGo operates international flights from the new terminal at Chennai Airport

Indigo’s market share in the Indian aviation sector has witnessed significant growth, 60 percent higher, or 390 basis points, in May. This followed an increase of 70 basis points in April, 90 basis points in March and 130 basis points in February. In May, the low-cost carrier carried 81.10 passengers.

Analysts are optimistic

Arun Kejriwal, founder of Kejriwal Research, expressed his confidence in Indigo’s ability to sustain its growth. Even at its peak, he explained, Jet Airways failed to capture a third of Indigo’s current market capitalization. He commended Indigo for securing a 60 per cent market share and for closing the largest aircraft deal in the history of the Indian aviation industry. However, he noted that doubling the market cap to ₹ 2-lakh crores would be difficult, given the current factors such as crude pricing and intensifying competition.

Despite these considerations, brokerage firm UBS raised its price target for Indigo to ₹3,300 from the previous target of ₹2,690. UBS believes Indigo is well prepared to handle any downturns and can manage fluctuations in crude oil prices or the US dollar without a significant cash burn.