Gangwal family considers Rs3,730-crore IndiGo stake sale in block deal
16 August 2023
By Aniket Gupta
The Gangwal family, promoters of the private airline IndiGo Airlines, were preparing to conduct a block deal on 16 August to sell their shares valued at Rs3,730 crore, or around $450 million.
The family is reported to have placed 15.6 million shares on the market, setting a floor price of Rs2,400 per share. This price represents a 5.8 percent discount from Monday’s closing price.
Morgan Stanley, JP Morgan, and Goldman Sachs have been engaged to provide advisory services to the Gangwal family for this transaction.
According to BSE records, the Gangwal family's ownership in IndiGo Airlines stood at 29.72 percent by June 2023's conclusion. However, collectively, the promoters maintained a total ownership of 67.77 percent in the company.
Initiating his IndiGo stake divestment, Rakesh Gangwal had initiated the sales process in September 2022. In February of the same year, he had resigned from the InterGlobe Aviation board as a non-executive, non-independent director. During that time, he had also expressed his intention to sell his complete holdings in IndiGo gradually over a span of five years.
After that, the company's board reached a unanimous decision to appoint co-founder Rahul Bhatia as the managing director.
On 2 August 2023, Indigo revealed its financial results for the June quarter, disclosing a record-breaking net profit of Rs3,090 crore for the first quarter of fiscal year 2023-24. This figure marks the airline's highest-ever quarterly net profit.
In a regulatory filing, the budget airline stated that it had documented a net loss of Rs1,064.2 crore during the corresponding period of the previous year (Q1FY23).
Driven by high ticket prices and weak competition, the net revenue from operations also experienced a substantial surge to Rs1,668.3 crore, marking a remarkable 29.7 percent increase from sales of Rs1,285.53 crore in the corresponding period of the previous year (Q1FY23).
The total revenue for Q1FY24 was Rs1,176.09 crore, reflecting a strong 31.8 per cent growth against Rs1,301.88 crore in Q1FY23.
The firm intends to allocate surplus funds for purposes such as acquiring aircraft and engines, acquiring ATR aircraft, enhancing infrastructure, and advancing digitization efforts.
The company is also establishing a venture capital division focused on investments in areas closely related to aviation, such as travel and lifestyle.