InterGlobe Aviation shares surge 4% after 3.9% equity changes hands via multiple block deals

InterGlobe Aviation share price, InterGlobe Aviation block deal: Shares of InterGlobe Aviation, the operator of the low-cost carrier IndiGo Airlines, gained on Monday (March 11), after 3.9 per cent equity, or 1.5 crore shares, changed hands via multiple block deals.

As per reports, the company's co-founder Rakesh Gangwal and family were likely to offload 2.23 crore shares, or a 5.8 per cent stake, of the company for Rs 6,600 crore. The deal was expected to take place at Rs 2,925 per share, a six per cent discount to the last closing price. 

At close, the stock stood at Rs 3,217.85, up 3.75 per cent on the BSE. The market capitalisation of the company at around the same time stood at Rs 1,24,202.15 crore. The airline company's stock has jumped over 72 per cent in the past 12 months. 

As of December 2023, promoters of InterGlobe Aviation owned a 63.13 per cent stake in the company, and Gangwal had an 11.72 per cent shareholding, as per a PTI report. 

Earlier, the promoters sold a 4.5 per cent stake in the company on August 16, 2023, and after that, there was a lock-in of 150 days for the further stake sale.

Until now, the promoters have offloaded a 17.4 per cent stake in the company in four tranches.

Why is Rakesh Gangwal selling stakes? 

In July 2019, IndiGo's two founders, Rakesh Gangwal and Rahul Bhatia, had a difference of opinion regarding the company's growth strategy, where Gangwal wanted an aggressive growth strategy whereas Rahul Bhatia rooted for a slow and steady growth plan.

In December 2021, both promoters reconciled by calling an extraordinary general meeting (EGM). Restrictions on promoter share transfer and change in InterGlobe's Articles of Association (AoA) were removed in the EGM.

Then, on February 18, 2022, Gangwal announced his resignation from the board of IndiGo and said that he would gradually sell his stake in the company within five years.

InterGlobe Aviation Q3 Results

IndiGo operator Interglobe Aviation reported more than a two-fold growth in third-quarter profit, thanks to air travel demand and higher fares in a seasonally strong period.

India's largest airline by market share said it expects capacity measured in available seats per kilometre to rise 12 per cent in the current quarter.

The low-cost carrier has India's largest airline fleet of 358 aircraft and commands a market share of more than 62 per cent.

The company reported a standalone profit of Rs 2,998 crore ($362 million) for the three months ended Dec. 31, compared with Rs 1,418 crore a year earlier.

It benefited from back-to-back festive and wedding seasons, along with the men's Cricket World Cup hosted in the country, analysts said.

(With inputs from Zee Business Research, PTI and Reuters)