After the stock of InterGlobe Aviation crashed near 9 per cent today over reports of dispute between the promoters of the company, IndiGo CEO Ronojoy Dutta has written to the employees assuring them the growth strategy of the airline is fully in place. Dutta's letter said that the management of the airline has the board's mandate to implement the growth strategy.
"You are all aware of the press reports regarding alleged disagreements between our two promoters, Rahul Bhatia and Rakesh Gangwal. 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," Dutta said in the email. The InterGlobe aviation stock declined nearly 10 per cent in intra-day trade on Thursday. Paring some of early losses, shares of InterGlobe Aviation closed trade at Rs 1,466.60 apiece, down 8.82 per cent.
The CEO said that the company would remain focused on creating value for its shareholders, customers, and employees. "We will continue our focus on creating value for all our shareholders, our customers, our employees and the communities we serve. Thank you for your dedication to our values of safety and courteous, hassle-free service to our customers," he further wrote.
The email comes after reports emerged of a serious rift between its founders, Rahul Bhatia and Rakesh Gangwal over the airline's expansion strategy. Both these industry stalwarts disagree on some clauses in the shareholders' agreement and the airline's management control, reports suggest.
The dispute between the promoters has reportedly escalated in the past few weeks, with Bhatia unsure about Gangwal's aggressive approach to expanding overseas. Bhatia also fears that Gangwal is trying to take greater control over the airline as he has hired his own team, including some top-level executives, on key posts in the recent past. The two have also reportedly hired law firms JSA Law and Khaitan & Co to settle issues of dispute.
Founded in 2006, InterGlobe Aviation, also known as IndiGo, was a joint venture between Bhatia and Gangwal. As of March 31, Rahul Bhatia has a family stake of 38.26 per cent stake in IndiGo, while Rakesh Gangwal, along with his family, owns 36.68 per cent in the low-cost carrier, which got listed in 2013. The Bombay Stock Exchange had sought a clarification from the company regarding the differences between the promoters, citing media reports. IndiGo in the clarification to the exchange said, "The company is not in a position to comment on such news as it relates to the promoters of the company."
Edited by Chitranjan Kumar