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Bloomberg
IndiGo, India’s biggest airline, fell the most in a year amid reports its billionaire founders have hired law firms after differences cropped up between them.
Rahul Bhatia and Rakesh Gangwal are trying to sort out disagreements about the carrier’s future strategy and clauses in the company’s shareholder agreement, the Economic Times newspaper reported, citing unnamed people close to the development. Legal firms Khaitan & Co and J Sagar Associates are working with the founders to find a solution, the newspaper said.
The growth strategy of the airline “remains unchanged and firmly in place,†CEO Ronojoy Dutta said in an email to employees, which was seen by Bloomberg. Shares of InterGlobe Aviation, which operates IndiGo, slid 9 percent to 1,464.90 rupees in Mumbai.
“Investors are likely jittery with the news-flow and want clarity on future strategy — does it stick to its core domestic market or embarks on an aggressive international push which could prove costly,†said Rahul Kapoor, a Singapore-based analyst at Bloomberg Intelligence.
Founded in 2005 by former US Airways CEO Gangwal and former airline sales agent Bhatia, IndiGo has quickly outpaced its rivals to grab almost half of the local market, making both founders billionaires.