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Shares of InterGlobe Aviation – parent company of the low-cost airline IndiGo – were down 4 per cent at Rs 2,025 on the BSE in Monday’s intra-day trade after one of its promoter and co-founder Rakesh Gangwal stepped down from the airline’s board.
The stock of airline company traded lower for the fourth straight day, down 8 per cent during the same period. In the past three months, the stock has underperformed the market by falling as much as 8 per cent, when compared with a 3.5 per cent decline on the S&P BSE Sensex.
“Rakesh Gangwal, Non Executive, Non Independent Director has tendered his resignation from the board of directors of the Company vide his letter dated February 18, 2022, with immediate effect,” InterGlobe Aviation said in an exchange filing on Friday after the market hours.
Rakesh Gangwal in his letter said that he will be reducing his stake in the company over the next five years. Gangwal controls 36.6 per cent stake in the airline company, while the other promoter Rahul Bhatia owns 38.18 per cent.
While new investors should benefit from the potential future growth in the company’s share price, a gradual reduction of my stake should also allow me to benefit from some of the upside,” Gangwal wrote in his letter to the board.
He said he was stepping down immediately as he did not want to hold access to unpublished price sensitive information while reducing his stake in the company. CLICK HERE FOR MORE DETAILS
Near term, Indigo is a proxy for a re-opening trade led by better yields and pent-up PAX demand. In the long run, XLRR fleet addition and strong cargo business shall enhance competitiveness, analysts at Edelweiss Securities said in company update.
“We anticipate Indigo’s yields would stay strong as domestic economy opens up. Besides, replacement of existing CEOs with NEOs by end-CY22 should enhance yields further and decrease costs. Near term, Indigo is a proxy for a re-opening trade led by better yields and pent-up PAX demand. Longer term, addition of XLRR fleet and improved cargo business shall enhance competitiveness,” the brokerage firm with retain ‘BUY’ rating and target price of Rs 2,380 per share.
As of 11:20 AM, the stock had recouped some of the losses, but still traded 1.4 per cent lower at Rs 2,085. Around 1.1 million shares were traded at the counter on the NSE.
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