NEW DELHI: IndiGo has become the world’s third most valuable airline (in terms of market cap) as its shares surge on the back of record quarterly profits, gain in market share, improvement in yields and optimism around capacity addition.
Share prices rose 4.73% on Wednesday to settle at Rs 3,807. In the past one year, the stock has rallied over 100% and its m-cap has grown to Rs 1,46,539 crore ($17.605 bn). With this, it has surpassed m-cap of US-based Southwest Airlines (current m-cap $17.333 bn). World’s leading two airlines in terms of market cap are US-based Delta Airlines ($30.442 billion) and Ireland-headquartered Ryanair ($26.941 bn).
IndiGo, the only Indian carrier in the top 10 list, has jumped 10 positions in the past year and overtook the valuation level of big names such as United Airlines and Air China, as per Bloomberg data. This remarkable feat is achieved by the Gurugram-based low-cost carrier at a time when competing airlines like Vistara and SpiceJet are facing operational issues and grounded carriers such as Go First and Jet Airways struggling to make a comeback.
“Disruption is temporary in nature at Vistara but would give short-term windfall benefits to IndiGo. Passengers would easily swift their preference to the next immediate availability and better service players and IndiGo is placed with leadership market share,” said Prashanth Tapse, Sr VP Research analyst at Mehta Equities. Jinesh Joshi - Research Analyst, Prabhudas Lilladher, said while the crisis in Vistara is not severe like some other airlines, it has led to flight cancellation on select routes benefitting IndiGo.