Shares of India's largest airline by market share IndiGo plunged in trade on Thursday morning, after media reports of an internal strife between promoters.
Shares of India’s largest airline by market share IndiGo plunged in trade on Thursday morning, after media reports of an internal strife between promoters. IndiGo share price tumbled more than 7.5% to hit intra-day low of Rs 1,487.10, its lowest since October 9th. The plunge in IndiGo’s shares comes after The Indian Express reported citing sources that the private airline’s promoters Rahul Bhatia and Rakesh Gangwal stand divided over management control and appointment of key executives, and have approached law firms to settle the internal strife. The publication further said that Rahul Bhatia and Rakesh Gangwal did not respond to their queries.
The airline’s co-founders– Rakesh Gangwal and Rahul Bhatia together held a 99% stake in the airline at the time of its listing in 2013. As of now, Rahul Bhatia holds 38% stake in Interglobe Aviation, which runs the IndiGo airline while Gangwal has 37% share in the company. Bhatia and Gangwal had together co-founded the company in 2006.
According to the sources of Indian Express, the duo Bhatia and Gangwal have been in conflict since the exit of airline’s CEO Aditya Ghosh in April 2018, according to The Indian Express sources. Furthermore, the appointment of “expatriates in management positions”, who were majorly handpicked by Gangwal from United Airlines (his former employer), also resulted in the tensions, the daily reported, citing sources as saying.
Jet Airways share price gained by more than 7.5% to Rs 133.35, reversing a trend of decline in the last three days. According to a PTI report, the top management of Darwin Group, which was one of the unsolicited bidders for Jet Airways, met officials of SBI Caps to discuss its proposal. According to the agency report, the Group has offered Rs 14,000-crore deal to the lenders for acquiring the grounded airline, PTI quoted its CEO Rahul Ganpule as saying.