IndiGo shares drop 5% as Gangwal family pares stake via block deal

Shares of InterGlobe Aviation, which runs low-cost airline IndiGo, on Wednesday declined up to 4.8% to day's low at Rs 2,425 after the promoter Gangwal family likely pared a part of its 29.72% stake in the company via block deals.

Gangwal family was earlier said to have put 15.6 million shares on the block with a floor price of Rs 2,400 per share, which was a 5.8% discount to the closing price of Monday.

Gangwals owned 36.66% of IndiGo in June 2022. Rakesh Gangwal, who has been pruning his stake since then, resigned from IndiGo’s board last February and had said that he would sell his take over the next five years.

With more shares getting freed up from the promoter's belt, the move would also lead to a change in weightage in MSCI and FTSE indices. Considering that today's deal size was about 15.6 million shares, Nuvama said FTSE should include additional floating shares within the next few days. "This inclusion is expected to generate a passive flow of approximately $15 million," Nuvama said, adding that MSCI is likely to incorporate additional floating shares during the November review.

"This anticipated inclusion could lead to an inflow of about USD 29 million, encompassing 1 million shares and resulting in a volume impact over 1 day," it said.

In the June quarter, the airline had swung to black by reporting a consolidated net profit of Rs 3,091 crore, compared with a loss of Rs 1,064 crore in the year-ago period. Q1 was the highest-ever quarterly net profit reported by the budget carrier, which it says reflects strong operational performance, execution of strategy, and favorable market conditions.

It ferried 26.2 million passengers in the June 2023 quarter with a load factor of 88.6%. At the end of June 2023, IndiGo had a fleet of 316 aircraft and had a net addition of 12 passenger aircraft during the quarter. The company guided that the second quarter of fiscal year 2024 capacity in terms of available seat