For over a decade, Indian Institute of Technology-Kanpur graduate and US-based investor Rakesh Gangwal, the brain behind IndiGo’s success and one of its co-founders, has shunned the limelight. Ahead of the airline’s 27 October initial public offering (IPO), Gangwal lays out the vision for India’s largest domestic airline and where he sees it going from here. Edited excerpts from an interview:
How do you see the Indian aviation market evolving in the next 3-5 years?
Phenomenal growth. Nowhere in the world do you have a situation where the market is growing at 20%. This is before the economy has kind of kicked in, before the Modi government has really started to make things happen. In America, where people make a lot of money, in Europe where airlines make some money, they are saying this is great. In 2011, Delhi-Srinagar, we flew once a day. Today we fly eight times a day—very profitable route. The economy is being driven by the middle class. They have more money and they are now seeing the value of money—a 10-hour journey versus one hour. If the growth of the market is 20%, sure there are some people who are repeat fliers, but there is a new element. So this is not going to stop. I think Rahul (Bhatia, founder-promoter), I and Aditya (Ghosh, president and executive director), we will be able to fulfill a dream in this lifetime of leaving behind a massive world-class product in India that is unmatchable. We will do that.
Why did you not choose to list overseas?
I will give you the corniest answer and we strongly believe in it—this is an Indian company and, yes, if we wanted to chase that last dollar, we would have listed in Singapore or London. The valuation would be fundamentally different. I don’t know what we are going to do with the money we have created. That is no longer the motivation in life. So it is a very different issue. It’s hard to explain it. Sounds real goofy, but such is life. The advantage is that this is our (joint) decision (with IndiGo’s majority holding company led by Rahul Bhatia). Sometimes I call Rahul (and ask) have you sold the company, well, my shares are still with me? But Qatar (Airways) keeps saying that they have bought us out. But it wouldn’t influence our strategy… what we want to do. We don’t want to become a feeder (airline). Qatar, we love them, they are a great airline. We are working on a marketing relationship (with them), but we don’t need their equity. In 10-15 years from now we will see.
23/10/15 Tarun Shukla/Livemint.com/DealStreetAsia
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How do you see the Indian aviation market evolving in the next 3-5 years?
Phenomenal growth. Nowhere in the world do you have a situation where the market is growing at 20%. This is before the economy has kind of kicked in, before the Modi government has really started to make things happen. In America, where people make a lot of money, in Europe where airlines make some money, they are saying this is great. In 2011, Delhi-Srinagar, we flew once a day. Today we fly eight times a day—very profitable route. The economy is being driven by the middle class. They have more money and they are now seeing the value of money—a 10-hour journey versus one hour. If the growth of the market is 20%, sure there are some people who are repeat fliers, but there is a new element. So this is not going to stop. I think Rahul (Bhatia, founder-promoter), I and Aditya (Ghosh, president and executive director), we will be able to fulfill a dream in this lifetime of leaving behind a massive world-class product in India that is unmatchable. We will do that.
Why did you not choose to list overseas?
I will give you the corniest answer and we strongly believe in it—this is an Indian company and, yes, if we wanted to chase that last dollar, we would have listed in Singapore or London. The valuation would be fundamentally different. I don’t know what we are going to do with the money we have created. That is no longer the motivation in life. So it is a very different issue. It’s hard to explain it. Sounds real goofy, but such is life. The advantage is that this is our (joint) decision (with IndiGo’s majority holding company led by Rahul Bhatia). Sometimes I call Rahul (and ask) have you sold the company, well, my shares are still with me? But Qatar (Airways) keeps saying that they have bought us out. But it wouldn’t influence our strategy… what we want to do. We don’t want to become a feeder (airline). Qatar, we love them, they are a great airline. We are working on a marketing relationship (with them), but we don’t need their equity. In 10-15 years from now we will see.
23/10/15 Tarun Shukla/Livemint.com/DealStreetAsia
