In a startling financial move, Rakesh Gangwal, a prominent promoter of InterGlobe Aviation, along with his family trust, has significantly reduced their stake in the airline. This move saw them selling a combined 5.83 per cent shareholding, translating to around Rs 10,500 crore.
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On Friday, shares of InterGlobe Aviation rose 1.48 per cent to close at Rs 4,829.20 apiece on the BSE.
Big Sell-Off by Gangwal and Family Trust
Rakesh Gangwal and the Chinkerpoo Family Trust, represented by trustees Shobha Gangwal and JP Morgan Trust Company of Delaware, sold a whopping 2.25 crore shares, equating to 5.83 per cent of InterGlobe Aviation. This was disclosed through two separate regulatory filings. Specifically, Rakesh Gangwal alone sold 22.50 lakh shares, while the Chinkerpoo Family Trust offloaded more than 2.02 crore scrips.
Impact on Stakeholding of Rakesh Gangwal
Post-sale, Gangwal’s individual shareholding in InterGlobe Aviation has dwindled to 5.31 per cent from the previous 5.89 per cent. Likewise, the Chinkerpoo Family Trust’s stake dropped from 13.49 per cent to 8.24 per cent. Consequently, the combined holding of Gangwal and the family trust now stands at 13.55 per cent, down from 19.38 per cent.
Details of the Sale by Rakesh Gangwal
On Thursday, Gangwal’s family trust executed a significant transaction by selling a 5.24 per cent stake in three tranches via open market transactions, netting Rs 9,549 crore. These transactions were carried out within the price range of Rs 4,714.95 to Rs 4,715.89 per share. Details of Gangwal’s individual stake sale value, however, couldn’t be confirmed at the time.
History of Sales
This sell-off is not the first instance of Gangwal and his family reducing their stake. Since February, following a dispute with co-founder Rahul Bhatia over corporate governance issues, Gangwal has been selling his shares.
In March, Gangwal had carried out similar transactions. Notably, since February 2022, both Rakesh Gangwal and his wife, Shobha Gangwal, have been steadily offloading their shares in the airline.
Here’s a closer look at the past transactions:
- August 2023: Shobha Gangwal sold nearly a 2.9 per cent stake for over Rs 2,800 crore.
- February 2023: Shobha Gangwal divested a 4 per cent stake for Rs 2,944 crore.
- September 2022: Both Rakesh and Shobha Gangwal sold a 2.74 per cent shareholding for Rs 2,005 crore.
The Feud and Resignation of Rakesh Gangwal
The ongoing differences with co-founder Bhatia led to Rakesh Gangwal resigning from the board of directors at InterGlobe Aviation in February 2022. During his resignation, Gangwal had mentioned his intention to gradually reduce his equity stake in the airline over the following five years.
InterGlobe Aviation on the Rise
Despite the share sales and internal disputes, InterGlobe Aviation, which operates IndiGo, remains strong in the market. IndiGo holds the title of the country’s largest airline with an impressive 62 per cent market share domestically. The airline is also making significant strides in expanding its international operations.
In a bid to enhance its service offerings, IndiGo plans to introduce business class seats this November and aims to induct wide-body planes by 2027.
Market Reaction
On the heels of these developments, InterGlobe Aviation’s shares saw a modest increase. On Friday, the company’s stocks rose by 1.48 per cent, closing at Rs 4,829.20 per share on the Bombay Stock Exchange (BSE).
The financial world continues watching these developments closely to see how both the company’s performance and its investor relations unfold in the coming months.
