IndiGo’s Shares Dropped After The Promoters Talked About Selling Shares Worth ₹2,930 Crores Via Block Deal.

IndiGo’s Shares Dropped After The Promoters Talked About Selling Shares Worth ₹2,930 Crores Via Block Deal.

Reports indicate that the parent company of IndiGo, InterGlobe Aviation Ltd.’s promoters plan to sell $350 million worth of shares in a block auction.

According to sources, the promoters are selling 1.56 crore shares at a floor price of Rs 1,875 each. On the current market pricing, this is a 5.6% reduction. The company’s shares finished at Rs 1,986,05, a 2.5% decline on the National Stock Exchange.

After the report, shares of InterGlobe Aviation Ltd dropped more than 4% in trading.

The IndiGo shares decreased 4.48% to $1,897.00 on the NSE from its previous close of $1,912.05. The airline company has a market value of $73,346 billion.

The Gangwal family has sold shares in InterGlobe Aviation twice, most recently for almost $250 million when they sold a 2.8% stake in the local airline.

A 72% share in the business that operates IndiGo Airlines was held by promoters and promoter group companies as of December 2022.

One of the promoters may have been selling shares, but it is unsure to tell who. Nonetheless, the seller may be a member of the Gangwal family.

The co-founder of India’s largest airline, Rakesh Gangwal, had previously stated that he would gradually lower his ownership of the business after leaving the board in February 2022.

In 2006, Rahul Bhatia and Rakesh Gangwal co-founded IndiGo Airlines. Gangwal announced his resignation from the board of directors in February of last year, along with his intention to gradually reduce his ownership of the business.

In open market transactions, Gangwal and his wife sold a 2.74 percent ownership in InterGlobe Aviation, the company that owns IndiGo, for Rs 2,005 crore in September.

As of December 2022, Gangwal, his wife Shobha Gangwal, and their family trust, who are all members of the promoter group, owned 33.78% of the airline firm.

The airline’s stock price has increased by 7% since the sale in September.

The airline industry is expected to grow, and the company’s performance is improving, therefore there may be significant interest in the stock.

India’s aviation sector is facing difficult times as businesses struggle with rising fuel prices, which have led to higher rates and the expectation of fierce competition in the near future.

IndiGo’s profit rose in Q3 FY23 amid the ongoing travel demand

Because of the increasing travel demand, the airline made a profit of Rs 1,422.6 crore in Q3 FY23 over Rs 129.8 crore in the corresponding quarter last year. Operating income climbed by 61 percent in the third quarter, rising to Rs 14,932 crore from Rs 9,294 crore.

According to a press statement, IndiGo’s overall revenue increased from Rs 9,480.1 crore in the same quarter last year to Rs 15,410.2 crore in the third quarter of the current fiscal.

The airline posted a profit of Rs 2,009.1 crore in the most recent December quarter, up from Rs 125.2 crore in the corresponding quarter last year, after excluding foreign exchange loss.

The budget airline carried 2.23 crore passengers in the third quarter, up nearly 26% from 1.78 crores during the same period last year, reflecting the high level of travel demand.

In comparison to a year earlier, the load factor, which measures seat occupancy, increased to 85.1% in the December quarter.

Against the backdrop of strong demand for air travel, third quarter performance was solid on both an operational and financial level. The vast array of initiatives that were launched throughout the company has begun to produce outcomes, according to IndiGo CEO Pieter Elbers.

He added that during the third quarter of the fiscal year 2023, the company reported its largest quarterly sales ever of Rs 154.1 billion and a healthy profit of Rs 14.2 billion. “With a cutting-edge fleet of more than 300 aircraft, we continue to serve the market, and we have plans for expanding our capacity in both domestic and foreign markets.

He claims that the forward bookings appear promising and that the Q4 fuel costs were largely unchanged. The company intends to keep up this hopeful pattern. They are eagerly anticipating the upcoming fiscal year as we continue our audacious expansion.

Regarding capacity, he stated that IndiGo provided capacity guidance between 13 and 17 percent at the beginning of this (fiscal) year. Yet despite the difficult circumstances on the supply chain, it has been able to retain the upper end of its capacity projection for the upcoming year by taking a number of mitigation measures.

According to the CEO of IndiGo, the airline plans to increase international connectivity in 2023 due to the rising demand for international travel. He also stated that the company will continue to explore strategic partnerships in the future that will allow added connectivity and give it more global visibility.

To meet the growing demand for travel to and from India, IndiGo put a Boeing 777 on the Delhi-Istanbul route. Turkish Airlines, which also has a codeshare agreement with IndiGo, provided the aircraft on a wet lease, which was then brought into service.

While IndiGo has a firm hold on the home market in India, its fleet of smaller aircraft has prevented it from expanding beyond short to mid-range foreign destinations like the Middle East and Southeast Asia.

Although the airline will ultimately introduce the long-range Airbus A321XLR aircraft, which will enable it to fly as far as Western Europe and the Far East, it is unclear whether IndiGo would ever commit to long-term widebody operations or not.

edited and proofread by nikita sharma