InterGlobe Aviation share price plunges over 17% as promoters' feud over corporate governance issues escalates
Shares of InterGlobe Aviation fell in early trade today after co-founder Rakesh Gangwal, raised corporate governance issues in IndiGo, forcing the market regulator Securities and Exchange Board of India (SEBI) to intervene.
InterGlobe Aviation share price declined as much as 17.54% to touch a low of Rs 1,291 on BSE on Wednesday.
IndiGo shares hit lower circuit since the pre-open session on Wednesday. Initially, the stock price of InterGlobe Aviation fell almost 156 points or 10% to trade at Rs 1409.20, against the previous close of Rs 1,565.75. Overall 1500 and 0.48 lakh shares were traded in the opening session today on BSE and NSE.
Later, the stock slipped 17.5% lower to Rs 1291, a fresh intraday low. The lower price band was further lowered from 10% at Rs 1409 to 20% at Rs 1,252.60 for the listed share on BSE. A total of 0.48 lakh and 48.6 lakh shares were changing hands on BSE and NSE, respectively, both above 5, 10 , 30-day average volume traded.
InterGlobe Aviation stock has formed a gap down chart pattern today and trades below its 30 and 50-day simple moving averages. The share price of InterGlobe Aviation has fallen 17 % in one month and 13% in last week.
Gangwal, who holds 36.68 per cent stake, wrote a 23-page letter to SEBI chairman Ajay Tyagi seeking regulatory intervention on his alleged grievances, with a copy to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri and Commerce Minister Piyush Goyal among others.
Gangwal alleged Bhatia of indulging in questionable related-party transactions and further added concerns about the questionable RPTs, fundamental governance norms and laws were not being adhered to and this would lead to "unfortunate outcomes" unless correctives were applied. According to him, the shareholders' agreement provides Bhatia unusual controlling rights over IndiGo.
"Beyond just questionable Related Party Transactions, various fundamental governance norms and laws are not being adhered to and this is inevitably going to lead to unfortunate outcomes unless effective measures are taken today," Gangwal said in the letter.
"I have vigorously attempted for almost a year to persuade the Company to shore up its governance standards, and all my attempts have been thwarted by the IGE Group. The Company's and certain Board members constant platitudes that they are "working on these issues ... going forward we will be more mindful ... we have been addressing these issues" have become just words. " the regulatory filing on the matter stated.
Meanwhile, SEBI in response has sought details from the Board of Directors of InterGlobe Aviation against the complaint filed by Gangwal. IndiGo's parent firm has been asked to furnish its response by July 19. SEBI has been probing the matter since reports surfaced about differences between the two key promoters. Earlier media reports suggested that there were differences between Gangwal and Rahul Bhatia over certain related-party transactions.
Currently, shares of InterGlobe Aviation are trading lower by 187.20 points or 11.96% to Rs 1378.55 on BSE.
Edited By Rupa Burman Roy