Shares of Interglobe Aviation Ltd, which runs India’s most profitable airline IndiGo, slumped over 7% on Thursday on reports that differences have cropped up between the two promoters over managerial control of the company. The two, Rahul Bhatia and Rakesh Gangwal, have hired legal firms for dispute resolution, according to reports.
It is learnt that the differences between the two co-founders are over Bhatia possibly feeling that Gangwal was trying to gain greater control of the airline by bringing his own team, as IndiGo plans to expand its footprints in the international markets.
Rahul Bhatia and Rakesh Gangwal have hired JSA Law and Khaitan and Co., respectively.
The news of the rift comes against the backdrop of the current turmoil in Jet Airways, which has temporarily shut operations and hit the Indian aviation market hard.
Rahul Bhatia has a family stake of 38.26% in IndiGo, while Rakesh Gangwal, along with his family, owns 36.69% in the low-cost carrier, which has a market capitalisation of Rs 61,833 crore.
Gangwal, a United Airlines and US Airways veteran, has been the driving force behind IndiGo’s emergence as one of the fastest growing carriers in the world.
Differences have cropped up on multiple occasions in the last two years, with Gangwal supporting growth at breakneck speed, while Bhatia opting for a more cautious approach.
With a domestic market share of 47% as of March, IndiGo has a fleet of 225 aircraft right now. The airline runs 1,400 daily flights to 54 domestic and 17 international routes.
At 11:26am, IndiGo shares were trading at Rs 1,500 apiece, down 6.8%, on BSE.
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