Synopsis: IndiGo shares fell over 3% after co-founder Rakesh Gangwal sold a 5.8% stake through a block deal worth ?11,928 crore. The move is part of his ongoing exit from the airline's parent company. Despite the stock dip, IndiGo continues to post robust financial results and expand its leadership in both domestic and international markets.
Shares of InterGlobe Aviation Ltd (IndiGo) fell over 3% in early trade after reports confirmed that co-founder Rakesh Gangwal sold around 2.26 crore shares, amounting to a 5.8% stake, through a block deal worth ?11,928 crore. The transaction was conducted at a floor price of ?5,260 per share, reflecting a nearly 3% discount to the previous close.
According to CNBC-TV18, Goldman Sachs, Morgan Stanley, and JPMorgan were the lead bankers on this high-value transaction. This marks another phase in Gangwal’s gradual withdrawal from the company after stepping down from the board in 2022. Despite his resignation, Gangwal remains a significant shareholder in the airline.
Stock Movement and Market Impact
Following the stake sale, IndiGo’s stock dipped over 3%, reacting to the bulk offloading despite solid fundamentals. Investors remain cautious about further exits and possible near-term supply overhang in the stock.
Financial Highlights
Despite the stock volatility, IndiGo delivered a strong Q4 FY25 performance:
- Net Profit: ?3,067.5 crore (up from ?1,894.8 crore YoY)
- Operating Revenue: ?22,151.9 crore (24% YoY growth)
- EBITDAR: ?6,948.2 crore (up from ?4,412.3 crore YoY)
- EBITDAR Margin: 31.4% (vs. 24.8% last year)
These results mark IndiGo’s second consecutive profitable quarter, powered by robust domestic travel demand and operational efficiency.
Strategic Revamp Under Pieter Elbers
Since the appointment of CEO Pieter Elbers in 2022, IndiGo has undergone a transformation. Leveraging his 30+ years of experience at KLM Royal Dutch Airlines, Elbers has enhanced IndiGo’s international footprint while solidifying its domestic lead.
- The airline now operates at a scale of over 10 crore passengers annually.
- It adds one aircraft per week, growing its fleet rapidly.
- It holds a 30% international market share in Available Seat Kilometers (ASK) for FY25.
- Key partnerships have helped extend IndiGo’s reach and operational synergies.
Despite the growth, Motilal Oswal Financial Services (MOFSL) has warned of a potential “key man risk” due to heavy dependence on Elbers' leadership.
Share Performance & Analyst Views
So far in 2025, IndiGo shares have returned 18%, and 28% in the past six months, supported by:
- Strong air travel demand
- Strategic fare hikes
- Softening crude oil prices
- A strengthening rupee
Elara Securities reported steady growth in passenger traffic during FY25, ranging from 5% YoY in Q1 to 20% in Q4. Events like the Maha Kumbh festival further fueled demand.
Looking ahead to FY26:
Elara maintains a cautious stance, warning of potential yield pressure from capacity-demand mismatches. They cut FY26E EBITDAR by 3% and set a Hold rating with a revised target price of ?5,199.
Nuvama Institutional Equities echoed this balanced outlook, citing stretched valuations.
Meanwhile, MOFSL remains bullish, upgrading its target to ?6,375 with a Buy rating, citing long-term confidence in IndiGo’s fundamentals.
Key Takeaways:
- Rakesh Gangwal’s ?11,928 crore stake sale marks a major move in IndiGo’s ownership transition.
- Despite the temporary stock dip, the airline's financial and operational indicators remain strong.
- Analyst sentiment is mixed, with some caution on near-term valuation and capacity risks, but optimism on long-term potential.
