InterGlobe Aviation was down 12.01% to Rs 1377.75 at 10:52 IST on the BSE after the company's co-founder raised corporate governance issue with market regulator Securities and Exchange Board of India.
The announcement was made after market hours yesterday, 9 July 2019.
Meanwhile, the S&P BSE Sensex was down by 95.33 points, or 0.25% to 38,635.49.
On the BSE, 5.30 lakh shares were traded in the counter so far compared with average daily volumes of 52,000 shares in the past two weeks. The stock had hit a high of Rs 1409.20 and a low of Rs 1291 so far during the day. It hit a 52-week high of Rs 1716 on 28 May 2019 and a 52-week low of Rs 697 on 9 October 2018.
Co-founder Rakesh Gangwal has written letter to Sebi alleging several violations at IndiGo including those pertaining to related-party transactions; appointment of senior management personnel, directors and the chairman, who has always been an independent director by convention.
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In his letter, Gangwal who holds 36.68% stake in Indigo has sought permission to hold an extraordinary general (EGM) meeting, alleging that the company has participated in objectionable related-party transactions (RPTs) and has not complied with corporate governance standards.
Investors fear that the fight between the two founders could potentially impact the company's expansion plans.
A foreign brokerage reportedly said that the dispute between Rakesh Gangwal & InterGlobe Enterprises has potential of lingering on and becoming a significant headwind. The investment firm further said dispute has not had an operational impact so far but cannot rule out, it added.
Interglobe Aviation's net profit rose 401.2% to Rs 589.59 crore on a 35.9% surge in net sales to Rs 7,883.27 crore in Q4 March 2019 over Q4 March 2018.
InterGlobe Aviation is an Indian low-cost airline.
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