The shares of InterGlobe Aviation, which owns the country’s largest airline IndiGo, were down nearly 2 per cent on Monday after the company announced that Rakesh Gangwal, co-founder of IndiGo, has stepped down from its board and will pare his stake in the airline over the next five years.
At 11:45 a.m., IndiGo was trading at ₹2078.90 on the BSE, down ₹41.40 or 1.95 per cent. It had opened at ₹2075.00 as against the previous close of ₹2120.30. It recorded an intraday high of ₹2100.00 and a low of ₹2025.45.
Gangwal’s decision comes months after shareholders voted to remove a provision that barred transfer of shares by promoters.
“Gangwal has resigned as a non-executive, non-independent director of InterGlobe Aviation — the holding company of IndiGo Airlines — with “immediate effect”, a stock exchange notification by the airlines said.
Promoter shareholding in IndiGo stands at 74.78 per cent. Gangwal’s stake is listed under the “foreign” category and is at around 14.65 per cent in his individual capacity, while his wife Shobha holds 8.39 per cent.
Gangwal’s letter to the board
In his letter to the board members, the IndiGo co-founder said that he continues to be a big believer in the long-term prospects of the airlines and more so now with the industry consolidation underway.
“I have been a long-term shareholder in the company for more than 15 years and it’s only natural to someday think about diversifying one’s holdings,” he wrote in the letter.
To avoid his exposure to any unpublished price-sensitive information, Gangwal said he decided to step down from the board.
“Accordingly my current intention is to slowly reduce my equity stake in the company over the next five plus years. While new investors should benefit from the potential future growth of the company’s share price, a gradual reduction in my stake should also allow me to benefit from some of the upside,” he wrote.