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IndiGo stocks in focus as Rakesh Gangwal likely to offload stake

IndiGo-stocks-in-focus-as-Rakesh-Gangwal-likely-to-offload-stake

Stock of InterGlobe Aviation, the operator of IndiGo, was in the news after the stock opened negative early trade after 2.6 crore shares, representing a 6.7% stake, were sold in a block deal. There was news reported earlier that co-founder Rakesh Gangwal, who, through family and trust accounts, owns around 25% of InterGlobe Aviation, was looking to sell a 3.3% stake in the company through block deals today.

Gangwal, co-founder of Interglobe Aviation's, stepped down in February 2022 and announced plans to dilute his family's stake in a phased manner. Rakesh Gangwal, his wife Shobha Gangwal, and their family trust held close to a 34% stake in the airline in December 2022. Shobha Gangwal has completely exited the airline by selling a 4% stake in the open market in August 2023. As of December 2023, Rakesh Gangwal held a 11.72% stake in India’s largest air carrier, IndiGo, and his family trust, The Chinkerpoo Family Trust, holds a 13.5% stake.

Airline business has been flying sky high due to supply constraints on various fronts. Even though many big players have joined the party and the major holiday season has passed, aircraft expansion takes time. This can be seen from the weight load factor, which measures the extent to which airlines utilise their ability to carry freight. The domestic passenger load factor dipped to 89.2 percent in January, compared to 90.7 percent in December. The international passenger load factor was down to 86.9 percent in January from 87.3 percent in December.

In the December quarter, the airline posted a 111% jump in net profit, thanks to continued demand for air travel and a fuel surcharge introduced in October.

Shares of InterGlobe Aviation have rallied nearly 72% in the past year and is currently trading 3% positive at Rs. 3,200 after a negative start.

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