IndiGo stake sale to raise funds to scale up hospitality biz: IGE

Rahul Bhatia-owned InterGlobe Enterprises (IGE) on Tuesday said it sold a 2 per cent stake in InterGlobe Aviation (known as IndiGo) via a block deal to raise funds for scaling up its hospitality business and other incubating ventures.

During the day, IGE sold 7.72 million shares in India's largest airline for about Rs 3,400 crore. As IGE is the main promoter group, the share price tumbled 4.26 per cent to Rs 4,368 apiece on Tuesday. 

Citigroup bought 3.1 million shares for Rs 1,362 crore. The names of the other buyers weren’t disclosed.

Allaying shareholders' concerns, IGE said that after the completion of this sale, "Rahul Bhatia-related promoter group" will continue to remain IndiGo’s largest shareholder. 

"Rahul Bhatia will continue to maintain his role as a Promoter and Managing Director and shall continue to drive the strategic direction of IndiGo along with Pieter Elbers, IndiGo’s chief executive officer," it added.

As of March this year, IGE held a 37.71 per cent stake in IndiGo, which has 370-odd planes in its fleet.

"The proceeds will be utilised for scaling up IGE’s hospitality and other businesses it is incubating, as well as for general corporate purposes," IGE mentioned. 

InterGlobe Hotels, a joint venture between IGE and Accor, runs 21 Ibis Hotels across India.

“7.72 million shares of IndiGo (representing 2 per cent of the total share capital of IndiGo) were crossed via a block trade on behalf of IGE today on the Indian Stock Exchanges," it said. 

Rahul Bhatia, group managing director of IGE said: “The strong response received from both existing and new investors demonstrates the competitive strength and long-term prospects of IndiGo. IndiGo is a standout success, and I am immensely proud of our company’s journey so far and remain very excited to continue to oversee IndiGo’s next phase of growth." 

 "I believe there is a long runway for growth as India continues to remain the fastest-growing aviation market globally and we have the right strategy and management team in place to capture this opportunity,” he added.