IndiGo Co-founder Rakesh Gangwal likely exits with Rs 11,000 crore stake sale

Rakesh Gangwal, co-founder and promoter of IndiGo, has taken a significant step toward his planned exit from InterGlobe Aviation by offloading a 6 per cent stake in the company. The shares were sold in a block deal on August 29, 2024, at a floor price of Rs 4,760 per share, valuing the transaction at Rs 11,000 crore, as detailed in a report by Moneycontrol.

This move aligns with Gangwal's strategy to gradually reduce his holdings in India's largest airline, as announced after he resigned from the board in February 2022. IndiGo shares marginally fell after the stake sale, trading at Rs 4,824 on NSE at 9.24 am, down about 0.78 per cent from the previous close. The sale saw approximately 2.3 crore shares change hands, indicating Gangwal's intention to near a complete exit from the airline.

This block deal also triggers a 150-day lock-in period, meaning Gangwal will not be able to sell more shares until the end of this period, as reported by CNBC-TV18 on August 28. IndiGo's stock responded to the news with a slight decline, trading at Rs 4,838 on the NSE by 9:22 AM, down 0.45 per cent from the previous close. The share price has been buoyant this year despite the aviation industry's challenges, and the current sale was executed at a slight discount.

Brief history of Gangwal family's stake in Indigo

As of June 2024, the Gangwal family, through various entities, held a 19.38 per cent stake in InterGlobe Aviation. Rakesh Gangwal himself owned 5.89 per cent of the company, while the Chinkerpoo Family Trust, which includes Shobha Gangwal and JP Morgan Trust Company of Delaware as trustees, controlled another 13.49 per cent. The family's stake in the airline has been steadily declining from 36.7 per cent in 2019 to its current level.

This is not the first major stake sale by the Gangwal family. The first tranche was sold in September 2022, reducing their holding by 2.8 per cent for Rs 2,000 crore. This was followed by another sale of 4 per cent in February 2023 for Rs 2,900 crore, and in August 2023, Shobha Gangwal sold nearly 3 per cent for Rs 2,801.8 crore.

The latest sale is a continuation of Gangwal's long-term plan to divest from the airline, which he helped build into a dominant force in India's aviation sector. The market will now closely watch how this exit impacts IndiGo's share price and its future direction as one of the country's leading low-cost carriers.