IndiGo shares slip 3% as co-founder Rakesh Gangwal likely offloads Rs 11,988 crore stake via block deal

IndiGo shares slipped 3% to their day’s low of Rs 2,922 after the co-founder Rakesh Gangwal likely sold off a 5.8% equity stake in the company worth Rs 11,928 crore, as per reports by CNBC-TV18.

2.26 crore shares likely changed hands in the block deal, however, official parties to the transaction are not currently known.

As per earlier reports, Gangwal intended to sell a stake in the airline through a block deal worth Rs 11,300 crore.

Global investment banks Goldman Sachs, Morgan Stanley, and JPMorgan are managing the sale, according to the report.

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The stake sale is part of Gangwal’s broader strategy to gradually exit the airline. He stepped down from IndiGo’s board in 2022 but has remained one of its largest shareholders.

Gangwal and his family have reduced their holding from 36.6% in 2022 to a current stake of 13.5%.

IndiGo Q4 earnings

IndiGo recently reported a 62% year-on-year rise in net profit to Rs 3,067 crore for the March quarter, supported by robust travel demand during the Maha Kumbh Mela and the wedding season. This marks the airline’s second-highest quarterly profit to date.

Revenue from operations for the quarter stood at Rs 22,152 crore, up 24% from Rs 17,825 crore in the same quarter last year.

However, for the full year ended 31 March, IndiGo’s net profit fell 11% year-on-year to Rs 7,258 crore.

IndiGo's yields-a metric of profitability-increased 2.4% on-year to Rs 5.32 per kilometre last quarter. Passenger load factor improved by 1.1 percentage points to 87.4%.

IndiGo share price target

According to Trendlyne, the average target price for IndiGo is Rs 5,883, implying a potential upside of around 9% from current levels. The stock has a ‘Buy’ rating based on recommendations from 21 analysts.

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