Is IndiGo's IPO priced too high?

The much-awaited initial public offering (IPO) of Interglobe Aviation, which operates IndiGo, is set to hit the market this week. The issue is expected to sail through comfortably because of its superior operating performance and profitability. But analysts have raised concerns over the pricing of the IPO that makes IndiGo one of the most expensively valued airlines worldwide.

A comparison of IndiGo's financial ratios with some of the top global airlines with a higher market capitalisation shows valuations are rich. IndiGo, India’s largest airline, is valued at 2.1 times its enterprise value (EV)/sales and at price-to-earnings ratio of 21.3 times the earnings reported in FY15. This is a premium to most other top airlines, according to a study of Bloomberg data.