InvestorQ : Why has the stock of Indigo been performing badly despite extremely good numbers reported?
Aashna Tripathi made post

Why has the stock of Indigo been performing badly despite extremely good numbers reported?

Answer
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Tisha Malhotra answered.
1 year ago


The quarterly numbers of Indigo have been extremely good and the net profits almost went up 40 times on a YOY basis. Indigo has been a big beneficiary of the closure of Jet Airways as it has bagged the biggest share of the additional market in absolute terms. However, the concerns over Indigo are more to do with the dispute between the two major promoter groups with almost equal shareholding in the company. The Gangwals and the Bhatias hold almost equal stake in Indigo but the differences have come out in the open of late.

Rahul Bhatia of the Bhatia family had been the driving force behind the growth of Indigo and its rising market share in India. The Gangwal family had essentially maintained its distance from the day-to-day management. However, in the recent past, the Gangwal family has raised serious objections to some of the intergroup transactions where it has accused the Bhatia family of acting against the interests of the shareholders at large. This has also resulted in SEBI getting involved and asking the company to explain. The Bhatia family has, in the meanwhile, denied any wrong doing.

The issue between the two promoter families appears to be all about greater control over the day to day operations of the airline. For a long time, it was only the Bhatia family that looked at the operations and the Gangwals were more of silent partners in the entire activity. Now they are also demanding their share of involvement in the company and the recently proposed board expansion was apparently intended at that. With greater representation of the Gangwal family in the board, this problem should largely be sorted out. It is this dispute that has kept the prices of the stock depressed.


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1 year ago


This is a bit of uncertainty due to some disclosures from the Board Members of apparent mishandling of the company.