Gangwal family sells 2.9% stake in Interglobe Aviation 

The big block sale of shares of Interglobe Aviation on 08th September was doing the rounds on the previous day itself. It was already announced that Morgan Stanley was to coordinate the sale of close to 2.9% stake in Interglobe Aviation by the Gangwal family office, one of the original promoters of Interglobal Aviation. Incidentally, Interglobe is the holding company that owns Indigo Airlines, which commands 58% market share in the domestic aviation market in India. The block sale is part of the agreement of exit by Gangwal.

According to Bloomberg, in early trades on Thursday a total of 11.2 million shares changed hands on NSE. That approximately corresponds to the 2.9% stake sale that the Gangwal family was planning to execute on Thursday, the 08th of September 2022. The block sale of 11.2 million shares representing 2.9% of Indigo was executed in 4 tranches on the NSE at an average price of Rs1,900 per share. The total value of the deal was worth Rs2,692 crore and represents a small percentage of the holding of Gangwal family in Interglobe Aviation.

It may be recollected that Gangwal, his wife Shobha and their family trust put together hold 36.6% stake in Interglobe Aviation prior to this deal. It is estimated that the stake of the Gangwal family would have reduced to 34% after this sale. When Gangwal resigned from the board, bringing an end to the long standing promoter feud, the agreement was that the Gangwal family would gradually pare down their stake to zero over a period of five years and take a total exit from the company. This was the first step towards that goal.

As of 12.35 pm on the 08th of September 2022, the stock of Interglobe Aviation is trading at Rs1,935.75 on the NSE. During the day, the stock touched an intraday high of Rs1,978 and an intraday low of Rs1,885. As of 12.35 PM on Thursday, the Interglobe counter has seen total volumes of 219.5 crore shares with a total value of Rs4,186.54 crore. The stock had fallen sharply after the block trade but has bounced back sharply since then. Interglobe has a total market cap of Rs74,616 crore and free float market cap of Rs18,654 crore.

While the specific identity of the buyers could not be ascertained, the brokerage had indicated that there was substantial institutional appetite for the stock from domestic mutual funds, insurance companies as well as from the foreign portfolio investors. With a 58% market share of domestic aviation market, Indigo is the best proxy for the India consumer story.