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An Indigo Airlines aircraft prepares to land in Mumbai, India (file). Shares of IndiGo, the only Indian airline to have made a profit in each of the past seven years, are due to begin trading tomorrow after the sale by owner InterGlobe Aviation.
Bloomberg
Dubai
Qatar Airways said it’s keen to take a stake in Indian discount carrier IndiGo once shares start trading following an initial public offering, after plans for a direct investment were frustrated by local regulations.
The second-biggest Gulf carrier could seek a maximum 49% of IndiGo - valued at $2bn based on the IPO price - to boost its exposure to one of the world’s fastest-growing travel markets, chief executive officer Akbar al-Baker said yesterday in an interview at the Dubai Airshow.
The sale of a 10% IndiGo stake in October’s IPO raised about 30bn rupees ($456mn), valuing the airline at $4.2bn and making it the third-largest low-cost carrier in Asia, with a value five times that of Jet Airways and nine times that of SpiceJet, the other two listed Indian airlines.
“I couldn’t take a stake in IndiGo because the Indian authorities have restrictions on airlines taking part in IPOs of an airline,” al-Baker said. “The process to do it would have taken a long time and they were in a hurry. If we can go up to the 49% that’s allowed, we’d like to go as much as that.” Al-Baker said it’s “crazy” that Qatar Airways faces having to pay more for the same stock after the IPO, adding: “What difference does it make?” The variation in cost will be seen “when and if purchase happens,” he added.
Shares of IndiGo, the only Indian airline to have made a profit in each of the past seven years, are due to begin trading tomorrow after the sale by owner InterGlobe Aviation Ltd. The IPO was priced at the top end of a marketed range, with institutional investors bidding for 17.8 times the stock reserved for them, according to India’s National Stock Exchange.
Al-Baker said in the interview that he’s also keen to lift his airline’s 10% holding in International Consolidated Airlines Group, parent of British Airways. Qatar Airways is “very likely” to increase the investment but will “take our own time,” the CEO said. Stakes in European Union airlines are limited to 49% for investors from outside the bloc.
Qatar Airways is also evaluating the case for buying a stake in Moroccan national carrier Royal Air Maroc to extend its reach into the underserved travel markets of West Africa and the Sahara. The Gulf airline has a code-share deal with RAM and would like to bring it into the Oneworld alliance.
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