IndiGo shares skid 3% amid block deal; co-founder Rakesh Gangwal likely seller

Shares of Interglobe Aviation, the parent company of low-cost carrier IndiGo, declined 3% in opening trade on Tuesday amid heavy volume due to a block deal. The names of sellers were not ascertained immediately but reports suggest that co-founder Rakesh Gangwal was looking to sell a stake of up to 3.4% in the country’s largest airline through a block deal valued at ₹6,831 crore.

Early today, IndiGo shares opened lower at ₹5,278 on the BSE, down 2.58% against Monday’s closing price of ₹5,418.30. In the early trade so far, the aviation heavyweight slid as much as 3% to ₹5,256, while its market capitalisation dipped to ₹2.04 lakh crore. The counter saw strong volume as 4.76 lakh shares changed hands over the counter amounting to a turnover of ₹251 crore, compared with two-week average of 0.19 lakh stocks.

According to reports, Gangwal is looking to offload about a 3.4% stake in IndiGo via block deals as part of his strategy to gradually trim his stake in the airline, which he co-founded with Rahul Bhatia in August 2006.

The floor price for the block deal has been fixed at ₹5,175 per share, a discount of 4.5% over the last closing price of ₹5,418.30 on the BSE. Goldman Sachs (India) Securities, Morgan Stanley India Company, and JPMorgan India are reportedly managing the deal.

Currently, Gangwal and his associated family trust own a 13.53% shareholding in IndiGo. According to the latest shareholding pattern available on the BSE, Gangwal holds a 5.3% stake in IndiGo, while the Chinkerpoo Family Trust—managed by Shobha Gangwal and JP Morgan Trust Company of Delaware—holds 8.23% shares in the company.

In the past few years, Gangwal and his related entities have gradually reduced their stake in IndiGo. In August last year, Gangwal and his family trust offloaded a 5.83% stake via block deals for about ₹10,500 crore, while they sold another 6% for ₹6,786 crore in March 2024. In August 2023, Gangwal’s wife Shobha Gangwal sold 3% shares for ₹2,802 crore, while his family divested 4% stake for ₹2,900 crore in February that year.

In February 2022, Gangwal, who controlled a 36.6% stake in the company, stepped down from the airline’s board after years of dispute with co-founder and promoter Rahul Bhatia. He announced to reduce stake in the company over the next five years.

For the fourth quarter ended March 31, IndiGo reported a 62% rise in consolidated net profit at ₹3,067.5 crore compared to ₹1,894.8 crore in the year-ago period, primarily due to strong demand for air travel. The company's consolidated revenue for the said period grew 24% year-on-year (YoY) to ₹22,151.9 crore, up from ₹17,825.3 crore in the year-ago period.

For the financial year 2024-25, IndiGo's net profit fell to ₹7,258.4 crore from ₹8,172.5 crore in the previous year, an 11% drop YoY. IndiGo's revenue from operations for FY25 rose 17% to ₹80,802.9 crore compared to ₹68,902.9 crore in the previous year, the exchange filing shows.

IndiGo has announced a dividend of ₹10 per share, subject to shareholder approval at the upcoming AGM.

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