Market panic grips IndiGo: Stock crashes 18% in seven sessions, erases ₹40,000 crore in value

Shares of InterGlobe Aviation , the parent of IndiGo, have witnessed sharp selling pressure over the past week, sliding over 18% in seven sessions as jittery investors rushed to cut exposure amid a sharp build-up of negative sentiment around the airline. The sustained sell-off has wiped out over ₹40,000 crore in market capitalisation for the country’s most valued carrier, which commands more than 60% of India’s aviation market.

Continuing its losing streak for the seventh straight session, IndiGo share price slipped another 1.6% in early trade to a nine-month low of ₹4,847.30, dragging its market capitalisation down to ₹1.88 lakh crore.

Since November 27, the stock has corrected 18% from ₹5,917.20, eroding ₹40,222 crore in market value from ₹2,28,753 crore level. The stock had touched a 52-week high of ₹6,225.05 on August 18, 2025, and a 52-week low of ₹3,946.40 on January 22, 2025.

Moody’s flags financial and reputational risks

IndiGo shares witnessed fresh selling pressure on Tuesday after global rating agency Moody’s flagged concerns over the airline’s mounting financial losses stemming from widespread flight cancellations, refunds and compensation payouts.

“The disruptions are credit negative because IndiGo could face significant financial damage from loss of revenue because of flight cancellations, refunds and other compensation,” Moody’s said in a report released on December 8.

While the agency noted that IndiGo’s strong fundamentals— including its dominant market share and low leverage—remain intact, it warned that profitability is likely to take a hit in FY26. Moody’s also pointed to rising reputational risks, which could strain the airline’s code-share partnerships.

The report further highlighted that the show-cause notice issued to CEO Pieter Elbers “could ultimately affect continuity of senior leadership at IndiGo”.

On Monday, IndiGo CEO Pieter Elbers and COO Isidre Porqueras submitted their responses to the show-cause notices issued by aviation regulator DGCA over the airline’s large-scale flight disruptions. The executives were required to file their replies by 6 pm after the regulator granted an extension from the initial 24-hour deadline.

The DGCA had issued the notices on Saturday, seeking explanations for the massive operational chaos, but extended the deadline to Monday evening after IndiGo requested more time.

Over the past week, IndiGo has faced severe operational turmoil, with thousands of flight cancellations and delays affecting a large number of passengers and triggering widespread disruptions across airports.

The crisis started on November 29, when an urgent mandatory software patch for Airbus A320 aircraft—issued under a global technical advisory—forced IndiGo to ground a large portion of its fleet for updates. With nearly 200 aircraft requiring the patch, the compressed maintenance window disrupted crew schedules and strained operations. The situation was further exacerbated by the full implementation of stricter Flight Duty Time Limitations (FDTL) norms from November 1, which mandate longer rest hours and cut the flying time permitted for pilots, tightening crew availability at a critical moment.

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