IndiGo's 100% stock rally: What comes next?
Subscribe to enjoy similar stories. Imagine this: it’s 2015, and India’s largest airline by domestic market share—IndiGo, holding nearly 35%—is preparing for its initial public offering (IPO). But this isn’t just any IPO; it’s one backed by a profitable airline boasting a rare 10% net profit margin.
A remarkable feat in an industry notorious for bleeding cash, especially in the shadow of Kingfisher Airlines’ dramatic collapse. Exciting, right? Would you have been tempted to jump in? I certainly was. In fact, I applied.
(Spoiler alert: I didn’t get an allotment, but that’s another story.) Fast forward to 2023, and what a ride it’s been—not just for the airline industry but for IndiGo, too. Over the past seven years, the airline has achieved stunning growth: Impressive, isn’t it? But here’s the twist: the stock price barely budged. From its IPO to mid-2023, IndiGo’s shares delivered a paltry ~5% CAGR return.
For investors, it felt like the stock was perpetually stuck on the runway. Read this | Luxury demand soars—meet the under-the-radar company cashing in big Then came the takeoff. In just 18 months—from mid-2023 to now—IndiGo’s stock price has soared by nearly 100%.
Yes, you read that right: a doubling in just a year and a half! So, what’s changed? Why is IndiGo suddenly soaring? More importantly, can it sustain this momentum, or are we in for another phase of stagnation where the stock hovers without much action? To answer these questions, we’ll delve into the business fundamentals, industry dynamics, and what’s fueling IndiGo’s resurgence. That’s exactly what this article will unpack. In the airline industry, success hinges on a simple premise: get more people to travel efficiently, and the company will thrive.
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