Rakesh Gangwal, co-founder of IndiGo Airlines, along with his family, is reportedly considering the sale of shares worth $450 million (approximately Rs 3,730 crore) through a block deal on Wednesday. This strategic move comes as the Gangwal family offers around 15.6 million shares, equivalent to a 4% stake in the airline, with a floor price of Rs 2,400 per share. Despite the floor price reflecting a nearly 6% discount from the Monday closing price, the decision is poised to impact the airline’s ownership landscape.
Key investment banks including Morgan Stanley, JPMorgan, and Goldman Sachs are advising the Gangwal family on the intricacies of the block deal.
As of June 30, 2023, the Gangwal family held a significant 29.72% stake in IndiGo Airlines, contributing to a total promoter stake of 67.77%. If the block deal proceeds as planned, the Gangwal family’s stake will decrease to approximately 25.72%. At the current market valuation, the Gangwal family’s total stake stands at over Rs 29,000 crore.
Notably, Rakesh Gangwal had resigned from the board of directors at InterGlobe Aviation in February of the previous year. During his resignation, he had indicated his intention to gradually divest his equity stake over a span of five years.
From an operational perspective, InterGlobe Aviation (IndiGo) has reported a significant upswing in its quarterly profit after tax, reaching an impressive Rs 3,090.60 crore in the June quarter. This stark improvement is in comparison to the corresponding quarter’s loss of Rs 1,064.30 crore from the previous year. The airline’s total income for the quarter also soared, hitting an all-time high of Rs 17,160.90 crore, as stated in a filing to the Bombay Stock Exchange (BSE). The airline attributes these robust numbers to their strong operational performance, strategic execution, and favorable market conditions.
Supplementing the financial achievements, IndiGo’s other income rose to Rs 477.80 crore from Rs 163.50 crore on a year-over-year basis.
CEO Pieter Elbers expressed the company’s contentment with its solid performance, marking a promising start to the year. The positive momentum of the last two quarters has culminated in robust operational performance, an impressive surge in quarterly passengers, and the highest-ever recorded revenue and net profit for the quarter ending in June 2023.
