Shareholders at the parent of India’s biggest carrier IndiGo today voted against a proposal to lift restrictions around the sale and acquisition of shares, the latest development in a power struggle between its two founding shareholders.
The motion to amend the company’s articles of association, voted on during an Interglobe Aviation extraordinary general meeting today, would have made it easier for its two major shareholder groups to sell or increase their stake in the Indian carrier. The proposal fell just short of securing a majority, securing 48.6% in favour of the amendment.
While low-cost IndiGo has continued its rapid expansion – among the carriers capitalising on the grounding last year of Jet Airways - and has just revealed a more than doubling of net profits to Rs4.96 billion ($69 million) in the three months ended 31 December, the group’s two biggest shareholders groups have been at loggerheads since the summer.
The change in share rules was sought by IndiGo co-founder Rakesh Gangwal, who with the Chinkerpoo family trust and Shobha Gangwal, holds through the RG Group a 37% stake in the company. Fellow co-founder Rahul Bhatia holds a 38% stake through the IGE group.
Specifically the motion would have deleted rules relating to the granting of first refusal the other co-founder group on transfer of equity shares
It also covered rules around the acquisition of shares under which the groups would not acquire additional equity shares, voting rights or other securities that would trigger an open offer under stock market rules.