Rakesh Gangwal, co-founder of InterGlobe Aviation, the parent company of IndiGo, has sold a 5.7% stake in the airline through a block deal valued at approximately ₹11,385 crore ($1.33 billion). The transaction involved around 22.1 million shares priced at ₹5,230.5 each, representing a 3.5% discount to IndiGo’s closing share price on Monday.
Background
Gangwal co-founded IndiGo in 2006 alongside Rahul Bhatia. However, in February 2022, Gangwal stepped down from the airline’s board following a public dispute with Bhatia over corporate governance issues. Since then, Gangwal and his family have been gradually reducing their stake in the company, which stood at 36.6% in 2022.
Details of the Sale
- Stake Sold: 5.7% of IndiGo
- Number of Shares: Approximately 22.1 million
- Price per Share: ₹5,230.5
- Total Value: ₹11,385 crore ($1.33 billion)
The sale was managed by major financial institutions, including Goldman Sachs, Morgan Stanley, and JPMorgan.
Market Reaction
Following the announcement, IndiGo’s shares fell by nearly 3% in intraday trading on Tuesday, reflecting investor concerns over the significant divestment by one of the company’s co-founders.
Future Implications
This sale is part of Gangwal’s ongoing strategy to reduce his involvement in IndiGo. The remaining stake held by Gangwal and his family trust is now approximately 7.8%. The continued divestment could lead to changes in the company’s shareholder structure and influence its future strategic decisions.
Feature Image Concept: An illustration depicting an airplane taking off with a backdrop of financial graphs, symbolizing the significant stake sale in IndiGo