The Company has called for an extraordinary general meeting (EGM) on 30 December, seeking approval to amend it’s Articles of Association (AoA) and remove restrictions on promoter share transfer.
Key points to note –
- Indigo has two founders – Rahul Bhatia and Rakesh Gangwal
- Bhatia group owns 37.83% stake of Indigo and Gangwal group 36.61%
- Two promoters have been at loggerheads with each other for almost 4 years. Gangwal had raised corporate governance issues at Indigo (targeted at Bhatia) and hence wanted to remove restrictive promoter stake transfer clauses – mainly Right of First Refusal (ROFR) and tag along. The said proposal was however rejected by shareholders in January 2020.
As the requisition for EGM this time has been jointly received from both the promoter groups, it seems that peace has been agreed upon and hence getting the shareholder approval should not be a challenge now.
It’s important that the feud comes to an end and focus shifts entirely on operations given the expected increase in the competitive pressures from the likes of Tatas, Rakesh Jhunjhunwala and also Jet (under the new owners).
Indian airline industry is never short of exciting news !
In the EGM held on December 30, 2021, the contentious restrictive clauses have been removed.
It’s good news for Indigo investors that this has happened. However, what exactly is the actual implication of this i.e., whether any promoter sells and how much, who comes in are the questions that only the time will answer.
As for now, at least there is peace amongst the promoters.