Indigo’s shares fall on reports of a clash between the airline’s owners

• Indigo’s shares fell by nearly 4% within the first hour of trading today on reports that the founders of India’s largest airline were clashing over its future.
  
• A report by ET found that the airline’s two founders - Rahul Bhatia and Rakesh Gangwal - were having serious disagreements over their visions for Indigo, and that there was a possibility that the dispute would end up affecting the airline’s operations.
  
• For its part, Indigo has dismissed the reports as “speculation”.

Indigo’s shares fell by nearly 4% within the first hour of trading today on reports that the founders of India’s largest airline were clashing over its future.

A report by ET found that the airline’s two founders - Rahul Bhatia and Rakesh Gangwal - were having serious disagreements over their visions for Indigo, and that there was a possibility that the dispute would end up affecting the airline’s operations.

While there are said to be a number of issues that Bhatia and Gangwal disagree over, the primary sticking point related to specific clauses in the shareholders’ agreement.

The dispute, which has escalated since the beginning of the month, is said to be in its early stages, although both founders have reportedly hired law firms.

For its part, Indigo has dismissed the reports as “speculation”. In an email to employees, Ronojoy Dutta, the CEO of Indigo's parent Interglobe Aviation, reportedly said that Indigo's growth plans would be unchanged and that Indigo's management had the support of the governing board.

That being said, Gangwal and Bhatia have had their differences over the years.

Gangwal, a veteran of the US aviation market, has been the driving force behind Indigo’s expansion and international ambitions, which have translated into significant cash burn and unprecedented levels of plane orders.

This has led to differences with the airline’s senior management, including President Aditya Ghosh, who left last year after a turbulent set of final months.

Bhatia, meanwhile, has spearheaded Indigo’s domestic operations, employing a more cautious growth plan.

The next few months will be crucial for the airline. The suspension of Jet’s operations and Air India’s financial problems have left a sizeable chunk of the Indian aviation market up for grabs.



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