IndiGo’s Top Shareholder to Sell $394 Million Stake in Airline

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IndiGo, India’s leading low-cost carrier, is set to witness a significant stake sale as its largest shareholder, Interglobe Enterprises, plans to divest a 2% stake worth $394 million. The move, as reported by Reuters, marks the first such sale by Interglobe Enterprises in at least four years, a period during which the airline’s stock has experienced substantial growth.

Interglobe Enterprises, holding a 37.75% stake in Interglobe Aviation, the parent company of IndiGo, will offer the shares at a base price of 4,266 rupees each, according to a term sheet seen by Reuters. This price represents a 6.6% discount to the stock’s closing price on Monday. However, the stock dipped by 3.6% to 4,403.40 rupees on Tuesday following the announcement.

Led by Rahul Bhatia, the co-founder of IndiGo, Interglobe Enterprises will be subject to a restriction preventing further share sales for the next 365 days, as outlined in the term sheet. This sale comes amidst a surge in IndiGo’s stock value, which has more than quadrupled over the past four years.

In contrast, IndiGo’s other co-founder, Rakesh Gangwal, and his wife Shobha have gradually reduced their stake through multiple share sales over the past year. Despite these sell-offs, IndiGo’s stock has continued its upward trajectory, rising by approximately 85% in the last year alone, reaching numerous all-time highs.

Apart from its aviation ventures, Interglobe Enterprises is also active in the hospitality and logistics sectors. The company recently partnered with U.S.-based Archer Aviation to launch electric air taxis in India, showcasing its diversified interests.

Block trades involving around 1.1 million IndiGo shares took place on Tuesday, as per data from the National Stock Exchange. While these trades were executed at a discount to the previous closing price, they surpassed the base price set for the stake sale.

IndiGo, with a robust order book of over a thousand jets from Airbus, is eyeing expansion into long-haul travel and plans to introduce a business-class cabin later this year. This strategic move aligns with the airline’s ambition to further solidify its position in the competitive aviation market.