Shares of InterGlobe Aviation fell close to 4.5% on Thursday as co-founder Rakesh Gangwal’s wife Shobha Gangwal offloaded a near-4% stake in the carrier via a block deal.
According to exchange data, Shobha Gangwal sold 15.6 million shares in three tranches of 5,200,000 shares each, for Rs 1,885.72, Rs 1,889.19 and Rs 1,886.29 per share, respectively. The total deal value was Rs 2,944 crore ($355.5 million).
There will be a 150-day lock-up period for investors after the block deal, according to reports.
As on Thursday’s close, the company commanded a market capitalisation of Rs 73,160 crore, with a total volume of 17.05 million shares being traded on the BSE. As of December 2022, the promoter holding in IndiGo stood at close to 72%. The airline had reported a net profit of Rs 1,418 crore.
In September 2022, the Gangwal family had offloaded close to a 2.8% stake in the carrier for about Rs 2,000 crore ($250 million at the time).
This was a few months after Rakesh Gangwal had stepped down from the board owing to differences with co-founder Rahul Bhatia. Gangwal had said at that time he would pare his entire stake in the airline over a period of five years. He had served as a non-executive and non-independent director on the board.
A note by Prabhudas Lilladher following its Q3FY23 results said the airline is well placed to benefit from demand recovery and capacity deployment. It said domestic and international network expansion, tapering off of crude prices, a cost structure better than that of peers, and a healthy balance sheet (Rs 106 billion in free cash) were factors that keep IndiGo’s prospects good.
The firm had revised its target price to Rs 2,500 at 7x its December FY24E EV/EBITDAR (in line with its pre-COVID average of 8x earlier on Sep-24E).