Indigo experiences turbulence due to promoter feud

The operator of IndiGo Airlines, Interglobe Aviation’s co-founder raised corporate governance issue in the company with the Securities and Exchange Board of India (SEBI). Reacting to this development, the stock crashed by 10.73 per cent on Wednesday.

In a letter to SEBI, Rakesh Gangwal, co-founder of InterGlobe Aviation Limited stated several violations at IndiGo which include questionable related-party transactions, the appointment of senior management personnel, directors and the chairman. Gangwal who holds 36.68 per cent stake in IndiGo has requested permission to hold an extraordinary general (EGM) meeting alleging that the company has not complied with corporate governance standards. Pertaining to this matter, there has been a crisis like situation in IndiGo with investors, shareholders and employees worrying about the outcomes of the promoters' feud. Its is felt that instability related to the settlement of the company’s promoter issue can further cause the stock to weaken.

Reacting to this development, the stock of Interglobe Aviation closed at Rs. 1,397.75 per share, down by 10.73 per cent or Rs. 168. The intra-day low on Wednesday was Rs. 1,291. The 52-week high being Rs. 1,716 and 52-week low being Rs. 697.