Denial of Investment Talks: IndiGo Founder Refutes Rumors of Stake Acquisition in SpiceJet

In a swift response to recent rumors, sources close to Rakesh Gangwal, co-founder and majority owner of IndiGo Airlines, have categorically denied reports suggesting his involvement in acquiring a stake in SpiceJet. The speculation, initially reported by a prominent Indian media house, claimed that Gangwal was in “advanced talks” to secure a “sizeable” stake in SpiceJet, India’s low-cost carrier.

Over the weekend, these reports were dismissed as “baseless” and “misguided,” according to sources linked to the billionaire. The banker representing Gangwal emphasized the potential harm caused by such misleading information and urged the Securities and Exchange Board of India to investigate the origin of these rumors. SpiceJet’s shares had experienced a nearly 20% spike on October 13, fueled by the now-discredited speculation.

Gangwal, whose family still owns over 37% of publicly-listed InterGlobe Aviation Limited, the parent company of IndiGo, had previously hinted at selling down his stakes in the airline. As of June 30, 2023, promoters held almost 68% of InterGlobe’s shares. The latest quarterly financials reported a record net profit of INR30.9 billion (USD371 million), signaling a remarkable turnaround for IndiGo. CEO Pieter Elbers attributed this success to various factors, including weak competition.

Contrary to the optimistic trajectory of IndiGo, SpiceJet Limited faced challenges, reporting a net profit of INR2.05 billion (USD24.6 million) for the same period. Chairman and Managing Director Ajay Singh highlighted “multiple difficulties,” such as grounded aircraft, insolvency attempts by lessors, and a cash shortage. SpiceJet’s ongoing legal battles related to unpaid bills further underscored its financial struggles.

The banker representing Gangwal dismissed any notion of investment in SpiceJet, stating that Gangwal perceives the airline as a “dying airline.” This categorical denial aims to clarify the situation and dispel any lingering uncertainty surrounding the speculated investment talks, reaffirming Gangwal’s commitment to his current ventures and dispelling any notions of involvement with SpiceJet.