Rakesh Gangwal resigns from IndiGo board, to reduce stake in firm

In his resignation letter, he also said he will “slowly” reduce stake in the company for the next five years.

Rahul Bhatia and Rakesh Gangwal — two of the founders of the airline and who hold nearly three-fourth stake in the company — have been warring for a while. An extraordinary general meeting held in December paved the way for an amicable solution.

The dispute, which analysts largely saw as an ego issue, was over informing the other promoter if one wanted to sell his stake in the company. Moreover, the other promoter will have the first right to buy the stake on sale. The EGM removed these clauses from the company’s article of association.

Agencies

“I have been a long term shareholder in the company for more than 15 years and it’s only natural to someday think about diversifying one’s holdings. Accordingly, my current intention is to slowly reduce my equity stake in the company over the next 5 plus years,” Gangwal said.
“While new investors should benefit from the potential future growth in the company’s share price, a gradual reduction of my stake should also allow me to benefit from some of the upside. Like any plan, future events may impact my current thinking.”

Gangwal said since he will be offloading his stake, it is better to resign from the company and not be privy to unpublished price sensitive information (UPSI).

“I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any UPSI…. Regrettably and effective immediately, I am stepping off the Board. Accordingly, I ask that no company information be shared with me, that is UPSI,” he said.

Sometimes in the future, I shall consider participating again as a board member, he added.

He and his associates own 37 per cent stake in the airline.