InterGlobe Aviation stock slips as Gangwal family's lock-in period to sell further stake ends

The stock of InterGlobe Aviation, the parent company of IndiGo, slipped in morning deals on Tuesday (February 13, 2024) on a day when the lock-in period for the Gangwal family to sell its stake in the aviation company ended.

The stock closed the trading session on Tuesday down 0.62 per cent, or Rs 19.00, at Rs 3041.85. 

The Gangwal family has a 25.22 per cent stake in InterGlobe Aviation.

InterGlobe Enterprises (the Bhatia Family) is the biggest stakeholder in the company with a 38.1 per cent stake.

Westbridge Capital has a minority stake at 3.4 per cent.

The Gangwal family sold its 4.5 per cent stake in the company on August 16, 2023.

There was a lock-in period of 150 days for further stake sale, which ended today.

Till date, the Gangwal family has sold about a 12 per cent stake in three tranches.

Why is the Gangwal family selling its stake?

The differences between the two founders of InterGlobe Aviation started in July 2019.

Rakesh Gangwal expressed problems regarding corporate governance and related party transactions.

There were differences of opinion between the two founders regarding the company's growth strategy.

Gangwal wanted an aggressive growth strategy, whereas Rahul Bhatia wanted a slow and steady growth strategy.

Gangwal has alleged that various related-party transactions with the InterGlobe Enterprises Group [Bhatia's company] were executed without seeking audit committee approval.

Between FY11 and FY18, the value of related-party transactions increased from Rs 31 crore to Rs 315 crore.

In December 2021, both the promoters reconciled by calling an executive general meeting (EGM).

Restrictions on promoter share transfer and change in AoA removed in the EGM.

Gangwal announced his resignation from the board of IndiGo on February 18, 2022.

Gangwal said that he would gradually sell his stake in the company in five years.

Gangwal family's declining stake

Current 25.22 per cent
Feb 2023 29.72 per cent
Sep 2022 33.78 per cent
June 2022 36.61 per cent