BackIndiGo to pare promoter stake to meet minimum public shareholding norms
The board of InterGlobe Aviation, which runs IndiGo airlines, will meet on 31 July to consider ways to reduce promoters' stake from the current 85% to 75%
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New Delhi: The promoters of InterGlobe Aviation Pvt. Ltd, which runs IndiGo airlines, will reduce their stake in the airline operator to meet regulatory norms on minimum public shareholding, the company said on Wednesday.
The company’s board will meet on 31 July to consider ways to reduce the promoters’ stake to meet “applicable laws including through a follow on public offer and/or an institutional placement programme which may comprise of a fresh issue and/or an offer for sale and recommend the same for the approval of shareholders of the company, if required," it said in a statement.
The board would also consider the company’s financial results for the quarter ended 30 June on that day.
IndiGo is controlled by Rahul Bhatia and Rakesh Gangwal.
The airline, which has a 40% share of the domestic airline market, got listed on stock exchanges on 10 November 2015.
According to the rules, companies need to ensure minimum public shareholding of 25% within three years of listing. InterGlobe has to reduce its promoters’ holding from 85% to 75% to meet the regulatory norm.
“We expected it to be sometime next year but they have clearly advanced this," said an analyst who did not wish to be named.
IndiGo this year surprised investors by announcing plans to launch flights on regional domestic routes from November, and expressing its interest in bidding for Air India Ltd to launch low-cost international operations.
IndiGo has 136 planes in its fleet with about 450 planes on order.
IndiGo shares fell 1.53% to Rs1,256 on BSE, while the exchange’s benchmark Sensex gained 0.77% to 31,955.35 points.
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