Mumbai: Shares of InterGlobe Aviation, the holding company of Indigo Airlines, India’s biggest airline, fell 9.82 per cent intra-day on news that the two promoters who founded the carrier are having serious differences over the airlines’ control and performance.
InterGlobe Aviation closed 8.82 per cent down at Rs 1466.60 on the BSE after opening lower at Rs 1,580 and hitting an intra-day low of Rs 14,50.50 on Thursday.
In a clarification sought by the stock exchanges on news reports regarding differences among promoters Rahul Bhatia and Rakesh Gangwal, the management said, “The company is not in a position to comment on such news as it relates to the promoters.”
Reports also said in order to resolve the differences amicably, so that it does not affect the airline's functioning, Gangwal and Bhatia are taking help from law firms J Sagar Associates and Khatian & Co, respectively.
Rahul Bhatia along with family members and holding company Interglobe Enterprises owns around 38 per cent stake while Rakesh Gangwal along with family members and The Chinkerpoo Family Trust owns around 37 per cent share in InterGlobe Aviation.
The company’s CEO Ronojoy Dutta tried to calm nerves by writing to employees that the IndiGo management is fully charged by the board to implement its growth strategy. “The growth strategy of IndiGo remains unchanged and the airline's management has full backing of the company's board of directors to implement it, said Dutta, in an email on Thursday.
“Investors are likely jittery with the news flow and want clarity on future strategy-- does it stick to its core domestic market or embarks on an aggressive international push which could prove costly,” said Rahul Kapoor, a Singapore-based analyst with Bloom-berg Intelligence, adding, “We do not see any operational or earnings impact.”
Founded in 2005 by former US Airways CEO Gangwal and former airline sales agent Bhatia, IndiGo has quickly outpaced its rivals to grab almost half of the local market, making both founders billionaires.
IndiGo is one of the few Indian carriers with enough cash to aggressively expand, and it’s been mapping out a way to take passengers from places like New Delhi to London.