Gangwal family launches mega $450mn block deal in Interglobe Aviation, biggest yet

Gangwal family launches mega $450mn block deal in Interglobe Aviation, biggest yet

A notable development is currently unfolding within Interglobe Aviation, the parent company of IndiGo Airlines. According to reports, the Gangwal family, under the leadership of Rakesh Gangwal, is in the process of arranging a block trade with the aim of raising $450 million (equivalent to roughly Rs 3,735 crore).

This initiative is aligned with Rakesh Gangwal’s ongoing strategy to gradually reduce his stake in the airline. Various industry insiders have shared this information with Moneycontrol, a reputable financial news source.

Rakesh Gangwal, a co-founder of IndiGo Airlines, has been pursuing a methodical approach to divestment, which involves gradually reducing his family’s ownership in the company. The proposed block trade is a significant step in this direction and represents a considerable amount of capital.

As details continue to emerge, this development remains a prominent point of interest within the aviation and investment spheres, showcasing the evolving dynamics of key industry players and their strategies for future growth and investment.

The impending transaction marks the largest in a series of stake reduction moves initiated by the Gangwal family. In September 2022, the family sold a portion of their holdings, equivalent to 2.8 percent of the company’s shares, valued at Rs 2,000 crore.

Following this, in February, they sold an additional 4 percent stake for Rs 2,900 crore. These sales align with Rakesh Gangwal’s announcement that the family would gradually dilute its stake in Interglobe Aviation.

As of the latest stock exchange disclosures, the Gangwal family holds a 29.72 percent stake in the company. Rakesh Gangwal resigned from the board of Interglobe Aviation in February 2022.

This stake reduction exercise reflects the family’s strategic decision to gradually reduce its ownership in the company. The impending block trade is expected to have a significant impact on the company’s ownership structure and market dynamics.

The Gangwal family’s stake reduction endeavor has been put into motion, and it entails the sale of about 4 percent of their existing holdings in Interglobe Aviation.

As part of this transaction, the minimum price at which the family is willing to sell their shares, known as the offer floor price, has been established at Rs 2,400 per share. This offer floor price reflects a discount of approximately 5.8 percent when compared to the most recent closing price of Interglobe Aviation’s shares, which stood at Rs 2,549 per share. The information about these deal terms has been sourced from reliable channels such as Moneycontrol.

This stake reduction effort signifies a notable development in the ongoing transformation of Interglobe Aviation’s ownership structure, and the chosen offer floor price can have implications on market demand and shareholder interest in the sale of these shares.

As of the latest information, the current market capitalization of Interglobe Aviation stands at approximately Rs 98,313 crore. Over the past six months, the company’s stock price has registered an increase of over 22 percent.

This latest stake reduction move by the Gangwal family continues their phased approach to divesting their ownership in Interglobe Aviation. The transaction is expected to have implications for the company’s ownership structure and share price dynamics.

The launch of the block deal involving the Gangwal family’s stake reduction in Interglobe Aviation has been corroborated by two additional individuals. These sources informed Moneycontrol that the Gangwal family is receiving advisory services for the proposed transaction from prominent investment banks, namely Morgan Stanley, Goldman Sachs, and JP Morgan.

All three sources provided this information to Moneycontrol while choosing to remain anonymous. This development highlights the involvement of respected financial institutions in facilitating the stake reduction transaction and underscores the significance of the event within the aviation and investment landscape.

Moneycontrol has reportedly reached out to Rakesh Gangwal for clarifications and comments regarding the stake reduction transaction, but as of now, they are still awaiting a response from him. Additionally, attempts to contact the involved investment banks, namely Morgan Stanley, Goldman Sachs, and JP Morgan, for an immediate comment have been unsuccessful.

The context provided about KKR’s sale of its stake in Max Healthcare serves as a reference to a previous significant block deal in the Indian market. KKR’s exit from Max Healthcare was executed through a single block deal, and the transaction was valued at around Rs 9,290 crore. This event is noted for being the largest exit by the private equity major from an Indian company up to that point.

The comparison with the KKR-Max Healthcare deal underscores the significance of the potential stake reduction transaction involving the Gangwal family in Interglobe Aviation. Such high-profile transactions can have notable implications for both the company’s ownership structure and the broader investment landscape.