Shares of Interglobe Aviation recouped yesterday's losses and gained over two percent to Rs 4,866 on August 30 after promoter Rakesh Gangwal's family trust sold 5.24 percent stake in the airline for Rs 9,549 crore through open market transactions.
Analysts, meanwhile, are of the view that IndiGo has a strong hold in the aviation market, which should keep its wings soaring higher.
Chokkalingam G, founder of Equinomics Research suggested a strong 'buy' for IndiGo, saying that the market is not much concerned about the promoters' stake sale since it is not the first time Gangwal and his family have offloaded their stake.
He expects another seven percent upside from current levels, given that other peers like GoFirst and Jet Airways stand defunct, while SpiceJet has significantly trimmed its fleet network.
Moreover, the changing industry dynamics, strong airline growth story, and easing cool prices - all factors bode well for IndiGo's momentum, he added.
Similarly, Deepak Jasani, head of retail research at HDFC Securities believes that the stock's correction post the block deal was just temporary and current market dynamics stands favorable for IndiGo.
“As long as the company is doing well, people are not too concerned whether the promoter's stake is going up or down," he says.
The Chinkerpoo Family trust, whose trustee is Rakesh Gangwal's wife Sobha Gangwal, along with JPMorgan Trust Company of Delaware held 13.5 percent stake, as per June shareholding data.
Post the bulk deal on August 29, the trust holds 8.24 percent stake. It offloaded 2.02 crore shares or 5.25 percent stake at Rs 4,715 apiece. Meanwhile, Morgan Stanley Asia (Singapore) Pte bought 28.5 lakh shares or 0.74 percent stake at Rs 4,715.
ALSO READ: Brokerages give Indigo's premiumisation journey a thumbs up, see 26% upside
Gangwal family stake sale timeline
Rakesh Gangwal and his family have been steadily offloading their stake since he stepped down from the company’s board in February 2022. In September 2022, the Gangwal family and their trust sold a 2.8 percent stake through a block deal, reducing Rakesh Gangwal’s holdings to 13.24 percent, Sobha Gangwal’s to 7.04 percent, and the Chinkerpoo Family Trust to 13.5 percent.
By March 2023, Rakesh and Sobha Gangwal sold more shares, further diluting their stakes to 13.23 percent and 3 percent, respectively, while the Chinkerpoo Family Trust remained at 13.5 percent.
Despite these stake sales, analysts at Motilal Oswal believe IndiGo is well-positioned for future growth, supported by India's robust economic expansion. The airline's management has also been proactive in enhancing its global brand presence, aiming to capture a larger share of the international market in the coming years.
Currently, around 20 brokerage houses cover Interglobe Aviation, with 18 analysts recommending a 'buy' and just 2 suggesting a 'hold.' At current levels of Rs 4,845, the stock is trading at 10.76x time FY26 price-adjusted book and FY25 price to adjusted book of 19.24x.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
