Business

IIE DIGITAL DESK : In one of the largest secondary market block deals of the year, IndiGo co-founder Rakesh Gangwal and his family trust have divested a 5.7% stake in InterGlobe Aviation, the parent company of IndiGo Airlines, raising a staggering ₹11,559 crore. The transaction marks a significant step in Gangwal’s ongoing plan to gradually reduce his stake in the airline he helped co-found, while also reshaping the ownership landscape of India’s largest airline by market share.

The shares were offloaded via a block deal on the stock exchanges, where institutional investors and high-net-worth individuals picked up the bulk of the offering. According to exchange data, approximately 2.2 crore equity shares were sold at ₹2,400 per share—a slight discount to the stock’s recent trading price. The block deal was executed on Monday, and a notification to the bourses confirmed that the shares belonged to Gangwal and his family trust, The Chinkerpoo Family Trust.

This is not the first time Gangwal has pared down his stake. Since stepping away from the airline’s board in early 2022, Gangwal has been systematically reducing his holding in InterGlobe Aviation. At the time of his exit from the board, he had publicly stated his intention to gradually sell his shares over the next five years. Monday’s transaction is part of that larger plan and further consolidates the control of the company under other shareholders, including co-founder Rahul Bhatia’s InterGlobe Enterprises.

With this sale, Gangwal’s family’s stake in IndiGo is estimated to have dropped to around 13.5%, down from approximately 19.2% prior to the deal. The sale not only unlocks substantial capital for the Gangwal family but also reflects a continued trend of promoter-led stake sales across Indian corporates, particularly in sectors where valuations have remained strong amid robust investor demand.

Market watchers view the transaction as a strategic move by Gangwal, who has kept a distance from the operational management of IndiGo in recent years. While the exact use of the proceeds has not been publicly disclosed, such a sizeable exit gives the family the flexibility to diversify its investment portfolio or reallocate capital to other ventures.

Despite the large quantum of shares offloaded, the market absorbed the block deal smoothly, indicating strong demand for IndiGo stock. Analysts noted that the airline remains on a solid growth trajectory, bolstered by its dominant domestic market presence, rising passenger traffic, and a robust order book of aircraft. This confidence was reflected in the market's relatively steady reaction following the stake sale, with IndiGo shares showing resilience amid broader market volatility.

IndiGo continues to lead the Indian aviation market, maintaining a firm grip on over 55% of the domestic passenger traffic share. The airline has also made strides in expanding its international network, and its recent aircraft orders signal strong future expansion plans. In April 2024, the company placed additional aircraft orders as part of its aggressive fleet expansion strategy, which is expected to further solidify its position over the next decade.

The Gangwal-Bhatia partnership, which once defined IndiGo’s meteoric rise, had come under strain in the past due to corporate governance disputes. However, since Gangwal’s exit from the board and his commitment to disengage gradually from the business, the focus has shifted back to operations and market growth.

This latest stake sale is being interpreted by analysts as both a natural progression of Gangwal’s earlier decision and a signal that the company’s ownership is entering a new chapter—one potentially characterized by a broader institutional holding pattern. While Gangwal's reduced stake may limit his influence over future strategic decisions, the financial market’s appetite for IndiGo’s shares reaffirms investor faith in the airline’s long-term fundamentals.