Why Are IndiGo Shares Down Today?

Shares of IndiGo Airlines, India’s biggest airline, slumped nearly 4% on Wednesday on reports that a promoter group was likely to sell a massive block of shares.

What Happened: The Gangwal family, promoters of IndiGo, is set to sell around $450 million (₹3,730 crore) worth of shares in a block deal on Wednesday, according to multiple media reports that cited a term sheet. The family has reportedly placed 15.6 million shares on sale with a floor price of ₹2,400 per share, reflecting a 5.8% discount to Monday’s closing price.

The deal is being managed by Morgan Stanley, JPMorgan, and Goldman Sachs.

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As of June 2023, the Gangwal family held a 29.72% stake in IndiGo Airlines, and the total promoter stake in the company is 67.77%, according to BSE data. At current market prices, the Gangwal family’s stake is valued at around ₹30,000 crore, while the airline’s market capitalization stands at nearly ₹1 lakh crore.

After resigning from IndiGo’s board last February, Rakesh Gangwal said he plans to reduce his stake in the airline over five years from the 36.66% in he owned in June 2022.

Price Action: IndiGo’s share price was down 3.77% at ₹2,453 in early trade on Wednesday, recovering some losses after being more than 4% in the red at open.

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