IndiGo shares tumble over 11% amid spat between promoters over governance issues; market-cap drops by Rs 6,423 cr

Shares of InterGlobe Aviation plummeted over 11 percent on Wednesday wiping out Rs 6,423 crore from its market valuation following a spat between co-promoters over governance issues. The scrip tanked 10.73 percent to close at Rs 1,397.75 on the BSE. During the day, it plunged 17.54 percent to Rs 1,291. On the NSE, shares fell sharply by 11.12 percent to close at Rs 1,392. During the trade, it tanked 19.24 percent to Rs 1,264.85. Led by the sharp fall in the scrip, the company’s market valuation also declined by Rs 6,422.6 crore to Rs 53,765.40 crore on the BSE. On the traded volume front, 10 lakh shares were traded on the BSE and over one crore shares on the NSE during the day. InterGlobe Aviation is the parent of the country’s largest airline IndiGo. The company’s co-promoters Rakesh Gangwal and Rahul Bhatia are locked in a bitter battle, with the former seeking intervention of markets regulator Sebi to address the problems. Differences between the promoters of the country’s largest airline IndiGo came into public on Tuesday with Rakesh Gangwal alleging serious governance lapses by co-founder Rahul Bhatia who had earlier termed his demands as unreasonable. [caption id=“attachment_4391375” align=“alignleft” width=“380”]  Representational image. Reuters.[/caption] With the issues brewing for nearly a year, Gangwal has sought markets regulator SEBI’s intervention to address the problems. In a filing to the stock exchanges, InterGlobe Aviation, the parent form of IndiGo, said its board of directors has received a letter from Gangwal and SEBI has also sought a response on the letter. The markets regulator has been probing the matter since reports surfaced about differences between the promoters in May, sources said. “SEBI has in the meantime asked the company to give its response to this letter by 19 July 2019, with which the company will comply,” the filing said. Alleging that the company has “started veering off” from the core principles and values of governance, Gangwal has said that even a paan ki dukaan (betel shop) would have managed matters with more grace. Flagging concerns about certain questionable Related Party Transactions (RPTs), Gangwal said the shareholders’ agreement provides his long-time friend Bhatia unusual controlling rights over IndiGo. “Beyond just questionable Related Party Transactions, various fundamental governance norms and laws are not being adhered to and this is inevitably going to lead to unfortunate outcomes unless effective measures are taken today,” the letter said. --With PTI inputs