InterGlobe Aviation Shares Valued at ₹224 Crore Traded in Block Deal

On June 13, approximately 5.21 lakh shares of InterGlobe Aviation, the parent company of IndiGo, were traded in a block deal on the exchanges. The shares were transacted at an average price of ₹4,300 each, amounting to a total deal value of ₹224 crore. By 09:49 am IST, InterGlobe Aviation share price were priced at ₹4,278.55 on the NSE, reflecting a 0.5% decrease.

This block deal occurred just days following InterGlobe Enterprises' sale of a 2.2% stake in the low-cost carrier for ₹3,689 crore. InterGlobe Enterprises, which is the holding company for Rahul Bhatia's family, is listed as a promoter of InterGlobe Aviation.

As a result, Citigroup Global Markets Mauritius acquired 31 lakh shares, representing a 0.81% stake in the airline company, at a value of ₹1,362 crore.

As per the bulk deal data from the BSE, InterGlobe Enterprises sold 77,19,573 equity shares, equating to a 1.99% stake in InterGlobe Aviation, the operator of the IndiGo brand airline. Following this sale, InterGlobe Enterprises' shareholding in the company decreased from 37.75% to 35.76%. 

Nuvama Alternative & Quantitative Research had forecasted that following a prior block deal, the float of the low-cost carrier would rise to 49%, surpassing MSCI's assumed 45%. According to the Nuvama report, this increase could result in inflows of $53 million, equivalent to 1 million shares. Additionally, there would be a minor adjustment in the stock's weightage in the FTSE index, valued at approximately $15 million, as noted by Nuvama Alternative.

Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research, expressed optimism about IndiGo's fundamentals and quantitative momentum, anticipating strong performance from the stock in the short term.

Analysts at Elara Capital have maintained their 'Sell' rating on the stock, citing an expected pause in market share growth and a potential margin decline in the second half of FY25. According to their recent report, approximately 80 IndiGo aircraft, out of a total fleet of 136 fitted with Pratt & Whitney (P&W) engines, have been grounded, compared to 40 in Q3FY24 and 75 in Q4FY24, due to P&W's ongoing engine inspection exercise. This grounding has affected about 13% of domestic aviation capacity. 

This marks the first instance of the Bhatia Family selling their stake in InterGlobe Aviation since the IPO. The stake sale by InterGlobe Enterprises follows a series of stake sales by the other promoter, Rakesh Gangwal, who held a 5.89% stake in InterGlobe Aviation at the end of Q4FY24. After the block deal, a 365-day lock-up period for the seller is expected.

"Rahul Bhatia will continue to maintain his role as a Promoter and Managing Director of the Company and shall continue to drive the strategic direction of IndiGo along with Pieter Elbers, IndiGo’s Chief Executive Officer," InterGlobe added.

Financially, IndiGo operator InterGlobe Aviation reported a consolidated net profit of ₹1,894.82 crore for the quarter ending on March 31 (Q4) in the financial year 2023-24 (FY24). This represents a 106% increase compared to the ₹919.20 crore reported in the same period the previous year. However, sequentially, the profit decreased by 36.8% from ₹2,998.12 crore. Additionally, the company posted a 25.9% year-on-year (Y-o-Y) growth in revenue from operations, reaching ₹17,825.27 crore, up from ₹14,160.6 crore. Sequentially, revenue declined by 8.4% from ₹19,452.148 crore in Q3.

InterGlobe Enterprises operates across various sectors including aviation (IndiGo), hospitality, logistics, airline management, travel commerce, advanced pilot training, and aircraft maintenance engineering.