IndiGo Airlines (6E, Delhi International) is leaning towards the B787 as it narrows down options for a widebody order, according to a Reuters report. Boeing is reportedly ahead in the race to ink the order for around 25 aircraft, with IndiGo preferring the B787 product over the alternative A330-900N offering.
If correct, the decision would break with IndiGo's normal fleet acquisition strategy. Except for two B777-300ERs wet-leased from Turkish Airlines (TK, Istanbul Airport), the airline has exclusively operated Airbus narrowbodies and ATR72-600s. However, IndiGo is building up its network, especially its international network, recently launching flights to new markets in Africa, West Asia and Southeast Asia. IndiGo aims to double its capacity by the end of the decade.
Meanwhile, IndiGo's majority shareholders, the Gangwal family, have put another equity tranche on the market, reportedly offering 15.6 million shares at a price of INR2,400 Indian rupees (USD28.86) per share. The total value of the transaction is INR37.7 billion (USD453.3 million). Morgan Stanley, JPMorgan, and Goldman Sachs are advising on the sale.
IndiGo co-founder Rakesh Gangwal resigned from the airline's board in February. At the time, he said his family would sell off their shareholding in the airline over five years. Since then, individual family members and entities owned by the family have been slowly offloading chunks of stock, leaving the Gangwals with a 29.72% stake as of June 30, 2023 (down from 36.66% twelve months prior).
The latest tranche sent to market will cut the Gangwal's stake in Indigo to 25.72%. The asking price was a 6% discount on IndiGo's trading price on August 14, but the share price tumbled 4.8% overnight after news broke of the impending sale.
IndiGo commands a 58% share of India's domestic market. Unlike most other major Indian carriers, it has returned to profitability, recently reporting a consolidated net profit of INR30.91 billion (USD383.7 million) for the June quarter. It was the airline's highest-ever quarterly profit. IndiGo attributes this to a winning trifecta of strong operational performance, execution of strategy, and favourable market conditions.
