IndiGo co-founder Rakesh Gangwal plans to sell up to 14.7 million shares or a 3.8% stake in its parent firm InterGlobe Aviation Ltd through a block deal, according to a term sheet reviewed by Mint.
The sale is estimated to be worth up to $804 million, with an offer floor price of ₹4593 per share, a 5.5% discount to Wednesday’s close.
As of June, the Gangwal-backed promoter group held a 19.38% stake in InterGlobe Aviation, and Gangwal himself held 5.89%. Following the latest sale, the Gangwal-backed group's stake is expected to decrease to 15.58%. According to the term sheet, investment banks JP Morgan India, Goldman Sachs and Morgan Stanley India will conduct the stake sale.
InterGlobe Aviation Ltd runs IndiGo, India's largest domestic airline with a 62% share of the Indian market and a 16.9% share of the international market. The airline was co-founded by Rahul Bhatia and Rakesh Gangwal in 2006 but the partnership fell apart in 2019. In February 2022 Gangwal resigned from the board as a non-executive, non-independent director and announced plans to gradually reduce his stake in IndiGo.
The Gangwal-backed promoter group's stake dropped from 36.7% in 2019 to 19.38% in June 2024. This includes the 13.49% stake of Chinkerpoo Family Trust – whose trustees are Shobha Gangwal and JP Morgan Trust Company of Delaware – and Rakesh Gangwal's 5.89% stake.
In September 2022, Gangwal and his family sold a 2.8% stake in the airline for ₹2,000 crore, and in February 2023 they sold a 4% stake for ₹2,900 crore. In August 2023 Rakesh Gangwal's wife Shobha Gangwal, part of the promoter group, sold her entire (almost 3%) stake in InterGlobe Aviation Ltd for ₹2,801.8 crore through a bulk deal on the BSE.
"I have been a shareholder in the company for more than 15 years and it's only natural to someday think about diversifying one's holdings," Gangwal had written in his resignation letter in February 2022. Since then, he and his associates have been gradually reducing their stake in IndiGo. In March, Gangwal invested $20 million in manufacturing-services company Zetwerk.
Currently, Rahul Bhatia's InterGlobe Enterprises is IndiGo's largest shareholder. After selling a 2% stake for over ₹3,360 crore through a block deal in June, the promoter group led by Bhatia now holds a 35.91% stake in the airline.
InterGlobe Enterprises had clarified in July that the proceeds from Bhatia's stake sale would be used to expand its hospitality and other incubating businesses, and for general corporate purposes. Addressing concerns about his reduced shareholding, Bhatia reiterated earlier this month, “InterGlobe and I are here to stay.”
IndiGo has a fleet of over 380 aircraft and completed 18 years this month. It has more than 950 aircraft in the pipeline including 30 wide-body planes. The airline, which has offered only economy seats so far, recently announced the launch of its ‘IndiGo Stretch’ business class and a customer loyalty programme.
Interglobe Aviation's stock closed at ₹4,863.10 on Wednesday, up 2.45% on the day. The stock is up about 10% over the past month and more than 63% since the start of 2024.
