Shares of Interglobe Aviation, operator of low-cost airline IndiGo, surged more than 6 per cent after reports that the promoters of the company have finally agreed to end dispute relating to corporate governance issues. Today the shares of the airline company surged 6.2 per cent to Rs 1,618 per share during intraday trading. The shares opened higher in the early morning and but fell to 1,451.10 per share before recovering. According to CNBC TV18, while the final contours of the truce are awaited, Rakesh Gangwal and Rahul Bhatia have arrived at an agreement after the public spat.
In the board meeting held on July 19 and 20, along with considerations on April-June earnings of the airline, the promoter dispute was also discussed. The promoters have finally settled on operational issues and airline strategy, CNBC TV18 reported quoting sources.
Early in July, one of the co-founders of IndiGo Rakesh Gangwal had written a 14-page letter to the market regulator Securities and Exchange Board of India (SEBI), alleging serious corporate governance lapses at the airline. His primary concern, though, was the excess control that InterGlobe exercises over crucial decisions in India’s largest airline IndiGo. Gangwal even went to the extent of saying that a “paan ki dukaan” would have handled the matters with more grace. However, Rahul Bhatia denied the allegations made against him and wrote a several-points rebuttal blaming Gangwal for trying to dilute the rights of InterGlobe.
InterGlobe Aviation posted stellar results for Apr-Jun of this fiscal. It reported a profit of Rs 1,203.14 crore for the first quarter of FY20, its highest-ever quarterly profit. It had a profit after tax of Rs 27.79 crore in the year-ago period. The Apr-Jun profit increased more than 43 times, according to a regulatory filing. The company’s total income rose to Rs 9,786.94 crore for the June quarter from Rs 8,259.69 crore in the same quarter a year ago. Its revenue from operations soared nearly 45 per cent to Rs 9,420 crore, as per the exchange filing.