IndiGo Co-founder Rakesh Gangwal Resigns with Immediate Effect, to Reduce Stake Over 5 Years

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posted on 2 years ago — updated on 1 second ago

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Rakesh Gangwal owns 14.65 per cent share of India's biggest airline by market share while his wife Shobha Gangwal has an 8.39 per cent stake in it. In his resignation letter, he said that he will be reducing his equity stake in the company over five years

InterGlobe Aviation, the owner of popular budget airlines IndiGo, on Friday had announced that its non-executive and non-independent director Rakesh Gangwal resigned from the company, with immediate effect. Gangwal wrote a letter to InterGlobe board members saying that he will be reducing his equity stake in the company over five years. The promoter of InidiGo owns 14.65 per cent share of India’s biggest airline by market share while his wife Shobha Gangwal has an 8.39 per cent stake in it.

Gangwal wrote that he has been a shareholder of the popular budget airlines for more than 15 years. “It’s natural to somebody think about diversifying one’s holdings,” he mentioned. Gangwal family owns stake worth Rs 29,900 crore in the InterGlobe aviation, according to market capitalisation on Friday close.

This decision will help the new investors to benefit from the potential future growth of in the share price of InterGlobe Aviation. “The reduction of my stake should also allow me to benefit from the some of the upside. Like any plan, future events may impact my current thinking,” he further said.

Gangwal resignation from the IndiGo board added a fresh dimension in his longstanding feud with other IndiGo co-founder Rahul Bhatia. The resignation letter came two months after Rahul Bhatia had assumed the post post managing director. On February 4, Bhatia took charge as a managing director and the airlines never had a managing director earlier..

The IndiGo promoter said he was concerned about the optics of reducing his holdings although such transactions are undertaken only when “I do not have any unpublished price sensitive information”

“I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any unpublished price sensitive information (UPS). As you are aware, on an ongoing basis, the Company provides us information and some of this is UPSI,” his statement added.

He also requested that no such information on the company be shared with him following his resignation as a director, adding “there should be no reason to share such information.” Gangwal also mentioned that he may consider joining the board again as a member.

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