IndiGo Dips 3% As Rakesh Gangwal Sells 5.8% Stake Worth Rs 11,928-Crore Via Block Deal

Last Updated:May 27, 2025, 10:40 IST

Shares of InterGlobe Aviation Ltd (IndiGo) are in the spotlight today as reports suggest the Gangwal family is preparing to offload a 3.5 per cent stake

IndiGo Share Price Today: Shares of InterGlobe Aviation, the parent company of IndiGo Airlines, slipped over 3% after co-founder Rakesh Gangwal sold 2.26 crore shares, or approximately 5.8% of his stake, through a large block deal. The transaction, reported by CNBC-TV18 citing sources familiar with the matter, fetched around Rs 11,928 crore.

The block deal was executed at a floor price of Rs 5,260 per share, representing a discount of about 3% to the stock’s last closing price. Global investment banks Goldman Sachs, Morgan Stanley, and JPMorgan were reportedly engaged to manage the transaction.

This stake sale marks another step in Gangwal’s gradual exit from the airline’s holding company. He had earlier resigned from the board of InterGlobe Aviation in 2022, announcing plans to reduce his stake in a phased manner. Despite stepping down, Gangwal remains one of the company’s largest shareholders.

Meanwhile, IndiGo reported a strong financial performance for the quarter ended March 31, 2025. The airline posted a net profit of Rs 3,067.5 crore, its second consecutive profitable quarter, driven by robust domestic travel demand. This compares to Rs 1,894.8 crore in net profit during the same period last year.

Operating revenue rose 24% year-on-year to Rs 22,151.9 crore, just shy of analyst expectations pegged at Rs 22,500 crore. The airline’s EBITDAR (Earnings Before Interest, Tax, Depreciation, Amortisation, and Rent) surged to Rs 6,948.2 crore from Rs 4,412.3 crore a year ago, with margins improving to 31.4% from 24.8%.

Strategic Shift Under New Leadership

IndiGo has seen a strategic overhaul since the appointment of Pieter Elbers as CEO in September 2022. A veteran with more than 30 years at KLM Royal Dutch Airlines, Elbers brought global expertise that has helped IndiGo expand its domestic dominance and strengthen its international presence. Motilal Oswal Financial Services (MOFSL), however, flagged a potential ‘key man’ risk due to the heavy reliance on his leadership.

The airline now operates at scale—carrying over 10 crore passengers annually and adding one aircraft every week on average. It has expanded its international market share to 30 per cent of Available Seat Kilometers (ASK) in FY25, thanks to strategic airline partnerships. Efforts are also underway to boost brand recognition, enhance customer loyalty, and optimize flight schedules to improve service reliability.

Share Price Performance and Outlook

IndiGo shares have delivered an 18 per cent return in 2025 so far, and 28 per cent over the last six months, driven by strong demand, fare hikes, a softer crude oil price, and a strengthening rupee.

Elara Securities highlighted that IndiGo witnessed consistent growth in passenger traffic in FY25, ranging from 5 per cent YoY in Q1 to 20 per cent in Q4, aided by events such as the Maha Kumbh festival.

Looking ahead, Elara expects IndiGo to maintain its leadership position in FY26, driven by increased capacity. However, Nuvama Institutional Equities flagged near-term challenges, including an imbalance between capacity growth and demand, which could pressure yields. While current valuations appear stretched, Nuvama said the risk-reward is balanced, revising its FY26E Ebitdar down by 3 per cent and setting a new target price of Rs 5,199, with a ‘Hold’ rating.

Meanwhile, MOFSL remains bullish, reiterating its ‘Buy’ call with an upgraded target of Rs 6,375, reflecting confidence in IndiGo’s long-term fundamentals.

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