IndiGo shares dip over 4% as Gangwal family looks to sell stake via block deal
Shares of IndiGo’s parent company Intergloble Aviation were trading in the red on Thursday, a day after sources told CNBC-TV18 that Rakesh Gangwal and family are likely to sell a 2.8 percent stake in the airline via a block deal today.
Shares of IndiGo’s parent company Intergloble Aviation were trading in the red on Thursday, a day after sources told CNBC-TV18 that Rakesh Gangwal and family are likely to sell a 2.8 percent stake in the airline via a block deal today.
IndiGo shares fell more than 4 percent intraday and were trading 2.4 percent lower than the previous close at Rs 1935.80 on BSE at 12:50 pm. The downtrend follows the Gangwal family’s likely stake sale via global financial services major Morgan Stanley.
At present, Gangwal and his family own a 36.61 percent stake in InterGlobe Aviation, while co-founder and managing director Rahul Bhatia and his family own about 37.8 percent.
The floor price for the block deal has been fixed at Rs 1,850 per share, at a 6.5 percent discount from the current market price on Wednesday, according to multiple people familiar with the development.
The development comes days after IndiGo co-founder Gangwal exited the company’s board and planned to cut his stake in the domestic carrier over the next five years.
According to Mark D Martin of Martin Consulting Rakesh Gangwal is testing the waters with the small stake sale and doesn’t feel the need to read too much between the lines.
He believes that InterGlobe needs to expand globally as they are already saturated in the domestic market. IndiGo is already quite significantly exposed to the domestic market, he told CNBC-TV18.
Talking about competition, Martin said Air India would create a dent for players in some months. He doesn't think Gangwal would want to jeopardise IndiGo’s position and that he expects the latter to sell more stake.
Earlier in 2020, Gangwal and Bhatia were engaged in a spat when the former sought to modify certain rules in the company's articles of association as he alleged violations of corporate governance rules at the parent group.
The non-executive director wanted to drop an article that prevented co-founders from buying publicly-listed shares in InterGlobe and potentially triggering an open offer for the rest of the company.
Meanwhile, Pieter Elbers started as IndiGo Chief Executive Officer on Tuesday, replacing Ronojoy Dutta, who decided to retire on September 30.
First Published: Sept 8, 2022 1:26 PM IST
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