Gangwal Family Set To Sell A Portion Of IndiGo’s Stake Worth $450 Million Via Block Deal; Who Is Rakesh Gangwal?

The Gangwal family, who are the promoters of IndiGo Airlines, are, as per reports, set to divest a portion of their stake in IndiGo Airlines, valued at $450 million (equivalent to Rs 3,730 crore). 

The same is to be done through a block deal, wherein the family is offering 15.6 million shares with a minimum price of Rs 2,400 per share, marking a 5.8% reduction from Monday’s closing price.

Morgan Stanley, JPMorgan, and Goldman Sachs are said to be facilitating the block deal. The Gangwal family previously held a 29.72% stake in IndiGo Airlines, while the collective stake of promoters reached 67.77% by June 2023, as per data from BSE. 

At present market rates, the Gangwal family’s stake is valued at Rs 29,218 crore, and IndiGo’s market capitalization stands at Rs 98,313 crore. Notably, the family’s ownership decreased from 36.66% in June 2022, with Rakesh Gangwal progressively reducing his stake.

Rakesh Gangwal stepped down from IndiGo’s board in February of the previous year, expressing intentions to divest his stake over a five-year period.

In terms of operations, IndiGo reported a profit of Rs 3,090 crore in the first quarter of the fiscal year, accompanied by a record-high revenue of Rs 17,160 crore. This marked an 80% surpass of consensus expectations and was attributed to higher-than-anticipated yields and revenue passenger kilometer (RPK). 

During the June 2023 quarter, the airline transported 26.2 million passengers with an 88.6% load factor. The quarter saw a net addition of 12 passenger aircraft to IndiGo’s fleet, which totalled 316 aircraft by the end of June 2023. The company projected a 25% increase in capacity (in terms of available seat miles) for the second quarter of fiscal year 2024 compared to the same period in 2023.

Who Is Rakesh Gangwal

Rakesh Gangwal, co-founder and former Chairman of IndiGo, was born in Kolkata; he completed his schooling at Don Bosco, Park Circus. 

He pursued mechanical engineering at IIT Kanpur in 1975 and obtained an MBA from the Wharton School of the University of Pennsylvania. 

Rakesh is an Indian American business magnate and has held prominent roles, including Chairman and former CEO of the US Airways Group. He was associated with various significant positions, such as Chairman, President, and CEO of Worldspan Technologies from 2003 to 2007. 

Gangwal’s professional background encompasses ventures in consulting and private equity companies during 2002-2003. His career commenced with an association with United Airlines in 1980, and he held diverse roles at United Airlines, Philips India Ltd., and Ford Motor Co. 

He stepped away from IndiGo’s board in February 2022 due to a dispute with co-founder Rahul and proceeded to plan the sale of his stocks in the following years.

According to Moneycontrol, the family sold 2.8% of shares for Rs 2,000 crore in September 2022 and another 4% stake for Rs 2,900 crore in February 2023. 

Currently, the family retains a 29.72% share in the company; however, Gangwal’s intention to gradually reduce the family’s interest was declared upon his departure from the board.

According to Forbes, Rakesh Gangwal’s net worth is estimated at $4.7 billion in 2023. The family owns a $30 million mansion in Miami, Florida, formerly owned by billionaire Charles Johnson.

Rakesh resides in Miami with his wife and daughter. Their daughter, Parul, worked for Salesforce in California and established her startup, Wheelhouse Capital, in June 2021.

The Last Bit, The impending block deal involving the Gangwal family’s stake sale in IndiGo Airlines marks a significant juncture in the airline’s journey and the family’s legacy. 

As Rakesh Gangwal, a prominent figure in the aviation and business sectors, navigates the sale of his stake, the trajectory of both IndiGo and the family’s interests takes a new turn. 

The sale not only bears financial implications but also holds the potential to reshape one of India’s leading airlines.