MEET Shobha Gangwal A Billionaire With 1 Stock, Who Sold Rs 2,802 Crore Worth Stake In Rs 95,000 Crore Airline

Interglobe Aviation, the low-cost carrier under the brand name Indigo, traded nearly a per cent up on Thursday. The airline saw more buying after a block deal where promoter Shobha Gangwal offloaded up to a 3% stake in Indigo. Shobha who is the wife of Indigo's co-founder Rakesh Gangwal, is among the major investors and is still the second largest shareholder in the airline after promoter group Interglobe Enterprises. The airline is worth over Rs 95,000 crore as of August 17, in terms of market capitalisation. Not just that, Indigo dominates the Indian aviation industry in terms of market share.

At the time of writing, Indigo's stock price traded at Rs 2,465 apiece, up by Rs 7.40 or 0.30% on BSE. The stock jumped by at least 1% with an intraday high of Rs 2481.95 apiece earlier in the day.

Data from BSE showed that Shobha offloaded 1,15,23,361 equity shares in the airline through a block deal in the open market on August 16. The transaction was carried out in three tranches in a single day. She exited at least Rs 2801.8 crore worth of equity shares on Wednesday.

This was her entire shareholding of 2.99% stake that was as of June 30, 2023, in the airline.

Due to the block deal, Indigo share price tumbled by 3.6% to end at Rs 2,457.60 apiece on August 16.

However, sentiments have been healthy on Thursday.

Nevertheless, Shobha continues to hold the second largest shareholding in Indigo, but is the largest individual shareholder under the NRI/foreign individuals category. Shobha as trustree along with JP Morgan Trust Company of Delaware, still owns 13.50% stake or 5,20,50,413 equity shares in Indigo which was valued at nearly Rs 12,792 crore as of August 16, 2023. Together, as of June 30, 2023, she held 63,573,774 stake or 16.49%. Before the block deal on August 16, her shareholding of 16.49% was valued to Rs 16,200.82 crore in the airline.

That being said, Shobha is a billionaire with just 1 stock.

Meanwhile, her husband Rakesh is the second largest individual shareholder to the tune of 5,10,21,132 equity shares or 13.23% stake in Indigo. Rakesh co-founded Indigo in August 2006, along with Rahul Bhatia.

Under the Bhatia Family, as of June 30, 2023, Rahul Bhatia, his wife Rohini Bhatia, and father Kapil Bhatia hold 40,000 equity shares, 10,000 equity shares, and 50,000 equity shares respectively. While Asha Mukherjee and Alok Mehta hold 8,85,688 equity shares and 1,955 equity shares in the airline as well. These five investors come under the individuals/HUF category.

Meanwhile, Rahul Bhatia is the largest shareholder through his company, Interglobe Enterprises and holds 14,57,06,774 equity shares or 37.79% stake in Indigo as of June 30, 2023.

Overall, the promoters held 67.77% stake in Indigo by the end of June 2023 quarter.

However, after Shobha's 2.99% stake sale, the promoter's group holding has been trimmed to 64.78% in Indigo. The same will be reflected from the shareholding pattern update as of the September 30, 2023, quarter.

During the June 2023 quarter, Indigo posted a net profit of Rs 2,974.5 crore as against a net loss of Rs 1,064.3 crore in Q1FY23. Revenue from Operations increased by 29.8% YoY to Rs 16,683.1 crore. In the quarter, the airline's capacity increased by 18.8% to 32.7 billion, while number of passengers jumped by 30.1% to 26.2 million.

IndiGo is amongst the fastest-growing low-cost carriers in the world. IndiGo has a simple philosophy: low offer fares, flights that are on time, and a courteous, hassle-free travel experience. It had a fleet of 316 aircraft and provided scheduled services to 78 domestic and 22 international destinations as of 30th June 2023.

Post the record Q1 of FY24, Jinesh Joshi - Research Analyst, Prabhudas Lilladher in a research note said, "We believe IndiGo is well placed to strongly benefit from 1) capacity deployment (north of mid-teens capacity guidance remains intact for FY24E, despite an escalation in engine issues at P&W), 2) network expansion in domestic as well as
international markets and 3) superior balance sheet (Rs 157bn of free cash)."

However, despite a record quarter, Joshi's note said, "We cut our EBITDAR estimates by ~7% each for FY24/FY25E as yields are witnessing higher pressure on sequential basis (as compared to past) while ATF prices have increased by ~11% in last 2 months. We expect revenue CAGR of 15% over next 2 years with EBITDAR margin of 25.4%/28.1% in FY24E/FY25E. Retain 'BUY' with a TP of Rs2,855 (EV/EBITDAR multiple of 7x Dec-24E; no change in target multiple)."

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