 "Gangwal family may sell up to 8% stake in Indigo via block deals by July")
The Rakesh Gangwal family, which owns 30 per cent stake in InterGlobe Aviation, may sell upto 8 per cent stake in India's largest private airline via block deals by July.
The stake is valued at Rs 7,437 crore taking into account today's share closing price of Rs 2,411 a share. The airline's total market valuation was Rs 92,957 crore.
The family is bringing its stake down since September last year when it first sold a tranche of 2.8 per cent worth Rs 2,000 crore. The family sold another 4 per cent stake in February this year for Rs 2,900 crore. "Institutional investors have been approached by investment bankers seeking their interest in the stake. The stock has done well so far this year due to suspension of operations by rival Go First and cooling aircraft fuel prices," said a banker.
On February 18, 2022, Gangwal had resigned from the board of directors of the company, stating that he will gradually reduce his equity stake over the next five years. One of the founder of Indigo, Gangwal was the president and CEO of US Airways Group from 1998 until his resignation in 2001. He was later head of travel technology firm, Worldspan Technologies. He later set up Indigo airline with Rahul Bhatia.
An email sent to Gangwal did not elicit any response till going to press. Bankers said depending on the demand, the shares will be sold in the next few weeks via block deals like the previous transactions.
Both founders of the airline, the Bhatia family and Gangwal family earlier held equal stake in the airline. The Bhatia family currently owns 37 per cent stake in the airline, per data with the stock exchanges. Gangwal and Bhatia were locked in a battle over the running of the airline with Gangwal finally deciding to sell his stake gradually.
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As the post pandemic demand rises, the airline is planning to increase its fleet size to 350 aircraft in FY24 from 306 in FY23 and is also planning to add 10-15 new destinations in India and overseas. The management also expects the number of passengers to increase to 100 million in FY24 from 85 million in FY23.
Analysts said the management is taking several pre-emptive measures to increase its global brand awareness, as it expects to capture a bigger share of growth from the international market in the coming years due to lower base right now. "However, competition in the sector is expected to intensify with the resurgence of Air India and the entry of Akasa Air," said an analyst with Motilal Oswal Financial Services.