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India’s largest airline, IndiGo, plans to conduct an initial share offering this week as it seeks to raise as much as 32.68 billion rupees ($500 million).
The share offering would be India’s largest since 2012.
Owned by InterGlobe Aviation, IndiGo is India’s largest domestic airline by market share.
The public offer is set to open on October 27 and close on October 29.
It proposed to list on the Bombay Stock Exchange and the National Stock Exchange of India.
Global coordinators of the share sale include JP Morgan, Barclays and UBS, according to the company’s preliminary prospectus filed in June.
The budget airline warned in its initial prospectus that there was “no assurance that the new routes which we expand into will be profitable or become profitable.”
IndiGo’s international destinations currently include Singapore, Dubai and Bangkok.
According to Centre of Aviation (CAPA), IndiGo has been the only consistently profitable carrier in India for the past seven years.
IndiGo said it may not be able to successfully implement its planned expansion of its route network “due to factors beyond our control” – including economic, political and business conditions.
In August 2015, IndiGo finalized a deal with Airbus to buy 250 A320neo aircraft.
The deal followed a series of orders Indigo has placed with Airbus, as it continues to win a bigger share of India’s fast growing aviation market.
The agreement was Airbus’ single largest order by number of aircraft and was worth a $26.5 billion at list prices.
IndiGo was founded in 2006 by travel entrepreneur Rahul Bhatia and Rakesh Gangwal, a former CEO of US Airways.
Virgin America airline shares surged more than 30% in the first day of trading on the NASDAQ stock exchange in New York.
Richard Branson owns nearly 25% of Virgin America, which is an offshoot of his London-based Virgin Group.
Virgin America started flying in 2007, and after several years of losing money, finally became profitable last year.
It reported profits of $10.2 million on revenue of $1.42 billion in 2013.
Virgin America sold 13.3 million shares that were initially priced at $23, raising about $307 million for the company.
The airline primarily operates long haul flights within the US, such as from New York to Los Angeles.
With a fleet of 53 planes within the US and Mexico, Virgin America is known for its flashy amenities, including mood lighting and wireless internet.
However, the airline offers fewer destinations than some of its competitors, and consequently carries only a fraction of the total passengers of rivals such as Southwest.
Overall, US airlines are flying high, as lower oil prices have recently led to an increase in profits.
The US recovery has also led consumers to purchase more airline tickets, keeping planes full.
One index of airline stocks hit a 13-year high recently, and analysts expect that upward flight path to continue.
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Alibaba’s shares closed significantly above their initial price on the NYSE on Friday, September 19.
Shares in the company made their debut in the US at $92.70, after being priced at $68 late on Thursday.
They ended the $93.89 – 38% above the initial asking price.
More than 100 million shares were traded in the minutes after the stock was launched – more than Twitter.
Earlier in the day, founder and chairman Jack Ma rang the opening bell.
The NYSE was festooned with the orange and white logos of the company to herald its arrival on public markets.
The company raised nearly $21.8 billion in its share sale, indicating strong investor appetite for China’s e-commerce giant.
Alibaba is now valued at $231.4 billion – making it significantly larger than Amazon and Facebook.
Alibaba’s shares closed significantly above their initial price on the NYSE (photo Reuters)
If Alibaba’s bankers decide to take up an option in which they can purchase 48 million shares themselves, then Alibaba’s launch will have raised nearly $25 billion – breaking the previous $22.1bn record set by China’s Agricultural Bank in 2010.
Alibaba operates a series of online marketplaces in China and elsewhere, handling more transactions than Amazon and eBay combined.
It is responsible for more than 80% of online e-commerce in China.
Alibaba’s share sale is being viewed as a way to invest in e-commerce growth in China.
Already, the country is home to the largest population of internet users on the planet – and most estimates say that only half of China’s 1.3 billion residents have signed online.
That is why investors have been angling for some time to get a piece of Alibaba – long the market leader in e-commerce in China.
However, investors are not buying shares directly in Alibaba’s companies operating in China, but rather in a holding company in Cayman Islands which has a profits contract with Alibaba.
That has made some wary, and it is one reason why Alibaba did not list on Hong Kong’s stock exchange.
Either way, the sale is expected to make millionaires out of a large number of the company’s managers, software engineers and other staff.
Currently Alibaba’s single largest shareholder is Japan’s Softbank which holds a 32% stake. Yahoo also has a stake.
Alibaba made a profit of almost $2 billion in the three months to the end of June, with sales up by 46% year-on-year to $2.54 billion.
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Alibaba shares have been priced at $68, the top end of the range, in a sign of strong investor appetite for the Chinese e-commerce giant.
With trading starting on the New York Stock Exchange later on Friday, September 19, the share sale will raise $21.8 billion, making it one of the largest flotations ever.
It values Alibaba, which accounts for 80% of all online retail sales in China, at $167.6 billion.
That value surpasses such corporate titans as Walt Disney and Boeing.
The final amount raised from the sale could change, depending on the final allotment allocation. If underwriters exercise an option to sell more shares, the money raised could increase to $25 billion, beating the record listing held by Agricultural Bank of China. That flotation in 2010 raised $22 billion.
Alibaba operates a series of online marketplaces in China and elsewhere, handling more transactions than Amazon and eBay combined.
The company was formed 15 years ago by former teacher Jack Ma, who wants to use some of the proceeds to expand in the US and other markets.
Alibaba shares have been priced at $68 ahead of NYSE flotation
Trading in Alibaba shares is expected to be frenetic in the early hours after the market opens. Many experts expect the share price to go higher once trading begins as institutions add Alibaba stock to their investment portfolios.
US search giant Yahoo, already a shareholder in Alibaba, is selling some $8 billion worth of its holding in the offering, leaving it with about 16% of the company.
Japan’s Softbank is not selling for now and will be left with a 32% stake, making it the largest single shareholder.
However, control will remain in the hands of Jack Ma and other company veterans. A group of 27 manager dubbed the “Alibaba Partnership” will have the power to nominate a majority of board members.
Regulators at the Hong Kong stock market objected to this structure, which resulted in Alibaba deciding to list in New York.
Alibaba says the arrangement will help it to preserve its innovative culture.
Jack Ma’s stake is reportedly worth about $14 billion, while the sale is expected to make millionaires out of a large number of the company’s managers, software engineers and other staff.
Alibaba acts as an online marketplace for wholesalers, retailers, and small businesses, and handles e-payments and financial transactions. The company has also branched out into cloud computing and instant messaging.
Alibaba has about 279 million active buyers visiting its sites at least once a month.
Online spending by Chinese shoppers is forecast soar over the next few years. And Alibaba has plans to expand into emerging markets as well as Europe and the US.
Alibaba made a profit of almost $2 billion in Q2 2014, with sales up by 46% year-on-year to $2.54 billion.
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