Friday, May 17, 2019

IndiGo tension simmers

The fissures that have emerged between the two promoters of IndiGo — Rahul Bhatia and Rakesh Gangwal — could see the carrier landing up at the National Company Law Tribunal if the board is not able to resolve the dispute even as the CEO of the budget carrier tried to lift the confidence of investors and flyers.

CEO Ronojoy Dutta’s assurances could not prevent the shares of IndiGo from going into a free fall. The stock dropped 8.82 per cent to close at Rs 1,466.60 on the BSE. During the day, it tanked 9.82 per cent to Rs 1,450.50. The company’s market valuation dropped Rs 5,455.89 crore to Rs 56,377.11 crore on the BSE.

Dutta in an email to his employees on Thursday said, “I want to assure you that the growth strategy of the airline remains unchanged and firmly in place, and the management is fully charged by the board to implement it.”

The IndiGo CEO referred to media reports in the communication. “I am sure that you are all aware of the press reports regarding alleged disagreements between our two promoters Rahul Bhatia and Rakesh Gangwal,” he said.

InterGlobe Aviation owns and manages IndiGo Airlines, which has around a 47 per cent share in the domestic market.

According to media reports, serious differences have cropped up between the two chief promoters over the strategies . On a query from The Telegraph, IndiGo said the company would not make any statement on the subject.

Gangwal and Bhatia have different strategies for the expansion of the airline, reports suggest.

The closure of troubled Jet Airways, besides the financial woes at Air India, has left a gap that provides an opportunity for other airlines.
17/05/19 Telegraph

0 Comments: