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NEW DELHI : IndiGo’s co-founder Rakesh Gangwal resigned from the company’s board on Friday as part of a plan to gradually pare his stake in India’s largest airline, weeks after shareholders voted to lift stake-sale curbs on promoters, signalling the end of a bitter public feud with co-founder Rahul Bhatia.

In a letter to the board of InterGlobe Aviation Ltd, the operator of IndiGo, Gangwal expressed his desire to reduce his nearly 37% stake in the airline over the next five years and asked that no unpublished price-sensitive information be shared with him.

He, however, left the option of returning as a board member open. “Sometime in the future, I shall consider participating again as a board member," he said, adding that “it’s only natural to someday think about diversifying one’s holdings".

Gangwal’s move comes days after Bhatia took over as the managing director of IndiGo, consolidating his hold over the airline that swung to profit in the December quarter after nearly two years of pandemic-related turbulence.

The series of developments point to a truce between the two feuding co-founders. Gangwal had levelled accusations of corporate governance lapses against Bhatia in 2019.

Gangwal’s stake is worth 29,892 crore based on IndiGo’s closing stock price on Friday. The stock fell 1.3% to 2,120.3.

As of 30 September, Bhatia’s IGE Group owned 37.83% of the airline, while RGE Group, which comprises Rakesh Gangwal, Sobha Gangwal, and Chinkerpoo Family Trust, held 36.6%.

Gangwal added that he is stepping down from his non-executive director position immediately but remains concerned about the optics of reducing his stake even though the transactions would be undertaken when he does not have access to any unpublished price sensitive information (UPSI).

“Accordingly, I ask that no company information be shared with me that is UPSI and, having stepped down as a director, there should be no reason to share such information," he added.

A senior industry official said it is difficult for Gangwal to offload his stake without leaving the board as he can be accused of insider trading.

“Gangwal may want to return after selling his stake, and as the representative of the new promoter in the board," the person added, requesting anonymity.

The feud between the two co-founders surfaced when Gangwal wrote to the Securities and Exchange Board of India (Sebi) to address corporate governance issues at the airline.

He had then cited violations such as related-party transactions and non-independence of the chairman.

With a 55.5% market share, IndiGo flies one in two domestic passengers. It carried 3.56 million passengers in January.

Gangwal had earlier held senior roles at United Airlines and US Airways before starting IndiGo with Bhatia in 2005.

He played a key part in setting up the airline and expanding its fleet, which, at 283 aircraft, is the largest in the country.

Earlier this month, the company reported its return to profitability after nearly two years, amid a steady rise in passenger traffic and fares.

It reported a profit of 129.80 crore in the three months ended 31 December from a loss of 620.14 crore in the year earlier.

The airline had last reported a profit in the quarter ended December 2019, just before the onset of the pandemic in India. It had reported a loss of 1,435.66 crore in the September quarter.

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