Co-founder Rakesh Gangwal Sells 5.83% Stake in IndiGo for ₹6,785 Crore

In a significant development, Rakesh Gangwal, the co-founder and promoter of IndiGo, India's largest airline, has sold a substantial portion of his stake in the company. On Monday, Gangwal offloaded 5.83% of his shareholding in IndiGo through open market transactions, amounting to a staggering Rs 6,785 crore.

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Trimming Shareholding Amid Corporate Governance Issues

This stake sale is part of Gangwal's previously announced decision to reduce his shareholding in the airline. In February 2022, Gangwal had made public his intention to trim his stake following a bitter feud with co-founder Rahul Bhatia over alleged corporate governance issues.

Details of the Share Sale

The sale involved a total of 2.25 crore shares of InterGlobe Aviation, the parent company of IndiGo. These shares were sold in three tranches, with prices ranging from Rs 3,015.10 to Rs 3,016.36 per share, as per bulk deal data on the Bombay Stock Exchange (BSE).

Discount to Closing Price

It's noteworthy that the shares were sold at a discount compared to InterGlobe Aviation's closing price of Rs 3,214.25 per share on the BSE. Despite this discount, the company's scrip ended the day with a gain of 3.63%, while the benchmark Sensex closed in the red.

Morgan Stanley Acquires Stake

In a related development, Morgan Stanley Asia Singapore Pte acquired a significant stake in InterGlobe Aviation. The company purchased 21 lakh shares, amounting to approximately 0.5% of the company's total shares, at an average price of Rs 3,015.10 per share. This transaction is valued at Rs 633.17 crore.

Promoter Shareholding

As of December 2023, promoters and promoter group entities held a combined 63.13% stake in InterGlobe Aviation. Rakesh Gangwal's stake stood at 11.72%, while the Chinkerpoo Family Trust, whose trustees are Shobha Gangwal and JP Morgan Trust Company of Delaware, owned 13.49% of the company's shares. Co-founder Rahul Bhatia and InterGlobe Enterprises held a combined 37.92% stake, according to BSE data.

Gangwal's Stake Sale Journey

Since February 2022, Rakesh Gangwal and his wife Shobha Gangwal have been gradually offloading their IndiGo shares. In August 2023, Shobha Gangwal sold a nearly 2.9% stake in the company for over Rs 2,800 crore. Prior to that, in February 2023, she divested a 4% stake for Rs 2,944 crore. Additionally, in September 2022, Rakesh Gangwal and Shobha Gangwal sold a 2.74% shareholding for Rs 2,005 crore.

Resignation from Board and Stake Reduction Plan

Amid differences with co-founder Rahul Bhatia, Rakesh Gangwal had resigned from the board of directors of InterGlobe Aviation in February 2022. He had also announced his intention to gradually reduce his equity stake in the airline over the next five years.