Big Exit Move: IndiGo Co-Founder Rakesh Gangwal Offloads 5.8% Stake; Shares Down 2%; Should Investors Worry?

Shares of InterGlobe Aviation, the parent company of IndiGo Airlines, came under pressure on Tuesday, slipping around 2% intraday after reports emerged that co-founder Rakesh Gangwal had offloaded a significant portion of his stake through a block deal.

IndiGo Share Price Update

As of 1 PM, shares of InterGlobe Aviation Ltd, the parent company of IndiGo Airlines, are trading at Rs 5,310.50, a decline of 2.02% from the previous close. Over the past 5 trading sessions, the stock has slipped by approximately 2.30%, indicating short-term bearish sentiment. However, on a six-month basis, IndiGo shares have delivered 24.43% returns.
So far this year, the stock is up by 15.52%.

IndiGo Block Deal Explained

IndiGo Airlines co-founder Rakesh Gangwal has sold 2.26 crore shares, which is about 5.8% of his stake, in a large block deal. According to a report by CNBC TV-18, the total value of the transaction is estimated at a whopping Rs 11,928 crore. This sale is part of Gangwal's ongoing plan to gradually exit his investment in InterGlobe Aviation, the parent company of IndiGo. The floor price for the block deal was set at Rs 5,260 per share.

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Gangwal had resigned from the board of InterGlobe Aviation in 2022. Even though he stepped away from the board, he still remains one of the largest individual shareholders in the airline as per reports.

IndiGo Q4 FY25 Results

IndiGo announced its financial results for the fourth quarter of FY25 on May 21. The airline posted a 62% year-on-year increase in consolidated net profit, which rose to Rs. 3,067.5 crore, compared to Rs. 1,894.8 crore in the same quarter of the previous fiscal year.

Revenue from operations for the quarter stood at Rs.22,151.9 crore, marking a 24% growth from Q4 FY24.
The airline's EBITDAR (Earnings Before Interest, Tax, Depreciation, Amortisation, and Rent) also jumped Rs. 6,948.2 crore, up from 4,412.3 crore year-on-year. The EBITDAR margin also expanded significantly to 31.4%, compared to 24.8% in the same quarter last year.

According to a report by Nuvama Institutional Equities, the short-term outlook for IndiGo looks difficult because the airline is adding more flights (capacity) faster than the growth in passenger demand. This imbalance is affecting ticket prices (yields) and could hurt profits.

Nuvama has slightly lowered its profit forecast for FY26 by 3%. However, the broking has updated its estimates for FY27, which has resulted in a 9% increase in the target price to Rs.5,199, while keeping the 'Hold' rating unchanged.

About IndiGo Airlines

IndiGo, operated by InterGlobe Aviation Ltd, is India's largest airline by market share and fleet size. Founded in 2006, IndiGo is currently a leading low-cost carrier (LCC) in the country. Headquartered in Gurugram, Haryana, IndiGo was founded by Rahul Bhatia and Rakesh Gangwal. It operates a fleet of over 350 aircraft, including Airbus A320, A321neo, and ATRs, and serves more than 100 destinations, including cities in Asia, the Middle East, and Europe.