IndiGo promoter dispute: Related party transactions a fraction of airline's consolidated turnover, says InterGlobe Enterprises

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26 Aug, 2025 12:21

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Related party transactions (RPTs) between InterGlobe Aviation (IGAL) and InterGlobe Enterprises (IGE), the main bone of contention between IndiGo’s co-promoters Rakesh Gangwal and Rahul Bhatia, were 0.53 percent of IGAL's consolidated turnover for FY19.

According to a release by IGE, the holding company of Rahul Bhatia's business empire, the total amount earned through these RPTs, which were in real estate, simulation training, GSA (Commission + Rent) and crew accommodation was Rs 118.96 crore in FY18, 0.50 percent of IGAL’s consolidated turnover.

The total amount earned was Rs 150 crore in FY19, 0.53 percent of IGAL’s consolidated turnover. The release also noted that the existence of these RPTs was disclosed at the time of the IPO in 2015 in the public domain.
After the IPO, the release also stated that many of the RPTs have ceased to exist while others have been renewed on an arms’ length basis as part of the normal course of business.

“The IGE Group has ensured that no entity of the group should take any advantage under RPTs. Without exception, IGAL has received more favourable treatment from the IGE Group entities as compared to their other customers,” stated the release.

In a letter dated July 8, Gangwal aired his grievances over the RPTs between IndiGo and other units of IGE. Gangwal stated these RPTs could be carried out as Bhatia has "unusual rights" over IndiGo due to the shareholders’ agreement between them. These controlling rights give IGE Group, a minority shareholder, significant influence over the decisions of IndiGo.

“I hadn't contemplated that over the years. Bhatia would start building an ecosystem of other companies that would enter into dozens of related party transactions with IndiGo. We are not against RPTs as long as proper checks and balances exist and such RPTs are in the best interest of the company,” stated the letter.

Gangwal, in his letter, provided some alleged events, which he felt was “collapsing corporate governance standards at IndiGo.”

In a letter written by Bhatia on June 12, he said Gangwal's ego was hurt as the company proceeded to make alternate arrangements for original equipment manufacturers (OEMs).

He also alleged that the Rahul Gangwal group wanted to relieve itself from its obligations under the shareholders' agreement and articles of association (AoA) as Gangwal is scared of liability in a highly regulated sector and that the real agenda of RG group is to dilute, diminish controlling rights of IGE group.