InterGlobe Aviation Founder & Family Trust to Sell Up to 2.30 Crore Shares

Rakesh Gangwal, one of the co-founders of India’s leading airline, IndiGo, along with the Chinkerpoo Family Trust, has reportedly initiated the sale of up to 6% of InterGlobe Aviation Ltd through a block deal. This transaction involved around 2.3 crore shares at a floor price of Rs.4,760 each, amounting to approximately Rs.11,000 crore. Following the sale, IndiGo’s share price experienced a minor decline, trading at Rs. 4,838 on the NSE, down about 0.45% from the previous close.

Ongoing Stake Reduction

As of June 2024, the Gangwal-backed promoter group held a 19.38% stake in InterGlobe Aviation, with Rakesh Gangwal personally holding 5.89%. Recent reports suggest that he may further pare down his holdings, potentially offloading equity worth Rs.10,300 crore, which represents about 5.8% of InterGlobe Aviation at the discounted share price. Additionally, this sale will trigger a 150-day lock-in period before any further transactions can occur.

Since stepping down from the InterGlobe Aviation board in February 2022, Gangwal has been executing his plan to divest his holdings over a five-year period. The sale is being managed by big names like JP Morgan India, Goldman Sachs, and Morgan Stanley India.

Previous Stake Sales

This isn’t the first time the Gangwal family has trimmed their stake in IndiGo. Back in September 2022, they sold a 2.8% stake for Rs.2,000 crore, followed by another 4% stake sale in February 2023 for Rs.2,900 crore. More recently, in August 2023, Rakesh Gangwal’s wife, Shobha Gangwal, sold off her nearly 3% stake for Rs.2,801.8 crore.

IndiGo’s Market Presence

IndiGo, operated by InterGlobe Aviation Ltd, is the top player in the Indian aviation market, holding a 62% domestic market share and a 16.9% share internationally. The airline, co-founded by Gangwal and Rahul Bhatia in 2006, has grown impressively, possessing a fleet of over 380 aircraft with more than 950 on order. Recently, IndiGo has been stirring things up with the introduction of a business class option, ‘IndiGo Stretch,’ and a customer loyalty program.

Conclusion: Gangwal’s stake sale of up to 6% in InterGlobe Aviation, amounting to approximately Rs.11,000 crore, caused a minor dip in IndiGo’s share price. This transaction, part of a planned reduction of his stake, includes a potential further 5.8% sale. Despite these changes, IndiGo’s position remains strong, with the airline continuing to expand its fleet and lead in the domestic market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.