InterGlobe Aviation shares tanked 4.6% in trade on Wednesday as IndiGo co-founder Rakesh Gangwal offloaded 5.1% or around two crore shares in a block deal in early trade. The floor price for the offer was presumed to be set at Rs 2,400 apiece, which would come in at a 5.8% discount to Monday’s closing price of Rs 2,549.
The block transaction aligns with Rakesh Gangwal’s strategy to reduce his share in InterGlobe Aviation, which oversees IndiGo, India’s premier airline. Previously, in September 2022, Gangwal, along with his family, divested 2.8% of their shares in the airline, netting Rs 2,000 crore. This February, they let go of another 4% share, securing Rs 2,900 crore.
Additionally, Nuvama added that it is highly likely that the MSCI index will incorporate additional floating shares during the November review. This anticipated inclusion could lead to an inflow of about $29 million, encompassing 1 million shares and resulting in a volume impact over 1 day.
InterGlobe Aviation Q1FY24
For the quarter ended 30 June 2023, IndiGo operator InterGlobe Aviation reported a net profit of Rs 3,090 crore in net profit, its highest ever quarterly earnings. In the corresponding period a year ago, the budget carrier posted a net loss of Rs 1,064.2 crore. Sequentially, the profit jumped 236% from Rs 919.8 crore recorded in Q4FY23.
“We believe Indigo is well-placed on its own trajectory, given strong air traffic growth, steady net fleet adds and a competition faced with its own troubles. We raise FY24E/25E PAT by 31%/38%, factoring-in the tax-loss benefit (zero ETR) and higher other income. Indigo’s ~1,000 plane order-book positions it well in the long run, to benefit from India’s aviation boom; retain BUY, with revised TP of Rs 3,000/share,” said Emkay.