DGCA conducted urgent meeting with Indigo & Goair for persistent issues regarding P&W engines on A320neos. They decided not to ban A320neos as they constitute 40% of the capacity. But decided to allow only those Neos with Modified mean gearbox and blades post this August.
There are total of 127 Neos between indigo and goair! serious consequence if they are already not modified.
2 Likes
1 Like
Forget about the company fundamentals and business for just a moment…does anyone feel scary while flying with indigo because of this news of these engines every now and then…we never know what’s in store with these faulty engines with recent accidents about the 737 max
Indian Air Safety standard is as good as (if not better than) European/US standards. Need not Worry abt such failures. Indigo flies 1400+ flights on daily basis because of this 1 or two snag cases are reported on weekly basis.
Neos can fly even if one engine is malfunctioning. Need not worry about safety.
2 Likes
QQ - Did everyone receive AGM/e-voting email? I have been holding Indigo shares for a few years now and did not receive any communication. I checked my mailbox and looks like I have not received any mail from them ever !! I do receive email communication from ALL the other companies in my portfolio without me doing anything myself. My email address is present with my demat account. I do see dividend of Rs 5 per share got credited in my account on 30th August.
Was IndiGo’s AGM stage-managed? Shareholders fawn over Rahul Bhatia; absent Gangwal gets the raps.
Founder-promoter Gangwal, who is largely credited with the airline’s success, came under fire for raising governance issues and sullying the airline’s image in public. Ironically, it was his idea to take the company public, which the other founder-promoter, and now his rival, Bhatia did not want
IndiGo’s annual general meeting (AGM) in south Delhi on Tuesday ended with the auditorium only half full. This led one of the minority shareholders to suggest to the airline’s founder-promoter Rahul Bhatia, sitting on the dais, to organise a lucky draw next time and offer a free air ticket to the winner to attract shareholders to attend. “That would be in the category of related-party transaction,” Bhatia, who has been upset by allegations of misgovernance at the airline hurled by second founder-promoter Rakesh Gangwal, shot back immediately. Bhatia’s opening remark set the tone of the AGM, but this was not the only time he would mock his new bête noire Gangwal, so far a friend of 25 years, at the two-hour long AGM. Bhatia, 59, joked about how he wanted to serve paan to all the shareholders but decided against it. He then added that for any answers from Gangwal, 67, who was not present at the AGM, one could always check the website he had launched: governanceindia.com. Bhatia’s one-liners were coming in between the questions being asked by around a dozen shortlisted shareholders who he was calling by name one after another. Most of them read from a diary, supporting Bhatia — sometimes with couplets — and the resolutions, and calling out Gangwal again and again. Absent from meeting, but Gangwal can’t escape the barbs Anil Parikh took the mike to say how he has not come across “any instance of sucking of funds” from IndiGo and wanted to know what evidence Gangwal had provided for his “insulting comments”. “I would like to ask Mr. Gangwal how he can say our company is a paan ki dukan when it is the best airline of India with 50% market share (and) INR62,000 crore market capitalisation. Mr. Gangwal don’t you have any respect for your own child? I hope Mr. Gangwal is watching this webcast — today we are doing a webcast — and that he understands our sentiments as shareholders. I am here to support all the resolutions,” he said with a lot of aggression in his tone and later also added that Gangwal had stripped his own child in public. Another shareholder, Jehangir Batiwala, couldn’t understand where Gangwal was coming from. “It’s hard to understand why any director, and that too a promoter-director who fails to inform the company (first) and instead decides to make a defamatory complaint to the regulator and start a media war on something that should have been investigated in the first place by the company itself …” Batiwala said. “IndiGo should have crossed at least INR2,000 (in share price). We are losing our money because of all these negative stories in the media quoted by Mr. Gangwal.” From a 52-week high of INR1,716, IndiGo’s share price fell to around INR1,350 after the news of differences between the promoters became public, but it is now trading at INR1,644 apiece. Its 52-week low was INR691 in the winter of 2018, when losses mounted. The closure of Jet Airways was a windfall for IndiGo, which made around INR1,200 crore profit in first quarter this year, sending the share soaring. To be sure, IndiGo has been investigating the misgovernance allegations internally for a year now. Dharmesh Vakil complimented IndiGo’s company secretary for sending the annual report “full of colorful pictures” at the right time and criticised Gangwal. “My heartiest congratulations to Bhatia sahab for being elected as chairman of today’s meeting,” Vakil said, adding, “I am a shareholder of many big companies like IndiGo. I am very sorry to inform you that I have never seen an experience that a director and that too a promoter director set up its own website to make his private grievances in public.” He also asked if IndiGo has a code of conduct to restrict directors from creating such websites. “Could Mr. Gangwal create such a website and place the company’s information there?” he enquired. Similarly, Kashikar Nandkishore said he was saddened that Gangwal questioned M Damodaran, who he said was a doyen when it came to regulations. “I welcome new chairman Bhatia sahib … with your vision and ability, our company will have more achievement and become the No. 1 company,” he said, ending with a Hindi couplet. Nandkishore was sitting close to the dais, which was surrounded by rows of plastic flowers and half a dozen bodyguards who ushered the board members out of the auditorium quickly after the meeting ended. Damodaran, present on the dais, said both the promoters are mature and hoped a resolution could be found. Bhatia’s wife Rohini Bhatia maintained a dignified presence, nodding to intelligent questions asked by an analyst (on how the company should not pay dividends, as there were deep-pocketed business houses emerging as rivals), while another board member, Anil Parashar, and company secretary Sanjay Gupta listened to the exchange carefully and took notes. Some shareholders asked Bhatia why Gangwal and his “friend”, independent director Anupam Khanna, were not present to take questions from shareholders. “ Main hoon na (I am there),” quipped Bhatia, who has now appointed all the top people of his choice at IndiGo, to claps from the audience. One of the shareholders suggested that Bhatia and Gangwal should go out on an outing and sort the matter once and for all. Bhatia replied he would “consider” it. Washington-based Gangwal has never really attended any AGM, which he finds a “ tamasha” when globally many firms are moving towards doing AGMs only online, according to a person familiar with the matter who did not wish to be named. “So what part of Gangwal’s ask was wrong? To have more independent directors on the board? To have a woman director? To have a transparent related-party policy? To close the loopholes in governance?” this person says. “What would Gangwal gain from answering someone who has 1,000 shares and has already made up his mind because he has been planted to say so? Nothing.” Indeed, in the week to the AGM, Gangwal finally agreed to vote in favour of all the resolutions because IndiGo agreed to his key demands. Gangwal wanted related-party policy agreed on July 20 to be cleared before the AGM and a clause that it cannot be changed during the transition period — in case there is an independent director who is not present or that position is vacant. Damodaran’s view was this can be resolved in a board meeting after the AGM. Still, he finally agreed to clear it via circulation among the board members online and it has also been agreed that no policy can be changed if even one board member is absent, including non-independent directors. This is why Gangwal agreed to the expansion of the board to 10 members, according to this person. It’s also likely that Gangwal will soon pull down the website he has created, as these issues have been resolved, but will continue to support the investigations of the Securities and Exchange Board of India and the Ministry of Company Affairs, he adds. The dynamics at play According to Shriram Subramanian, managing director of InGovern, a Bengaluru-based investment advisory firm, such character assassination of a promoter is common when the company commands control of the AGM, even though those who make allegations can’t prove anything. “There are plants — they maybe employees or other shareholders. Most AGMs are orchestrated whenever the management is in control of the AGM and the other party is not even present. The other scenario is that Gangwal could have been present and 10 of his people would have been planted and they would be asking questions,” Subramanian says, adding, “I attended a Mindtree AGM recently — where L&T had acquired 60% already — but everyone was praising the Mindtree founders and important issues were not asked of them.” Interestingly, at the IndiGo AGM too there was almost no questioning of the airline for not following processes for related-party transactions (RPTs) even though the company itself has admitted of procedural lapses. IndiGo CEO Rono Dutta, who Bhatia said is paid like a low-cost airline CEO — perhaps a dig at the former CEO-designate appointed by Gangwal who used to get around INR35 crore or around five times that of Dutta — said the RPTs were only about INR150 crore of the company’s INR30,000 crore revenue and that the firm does not regret even one of them. Indian School of Business professor Kavil Ramachandran, who specialises in family businesses, believes that the goings-on at the AGM make it clear that the two promoters have not talked much. “I think they did not do enough before the AGM to keep IndiGo as the common goalpost. The AGM could have been designed better as a joint meet. That would have sent a strong message to the shareholders,” says Ramachandran. He adds that Damodaran could have played a more active role to bring the two promoters together for the meeting. “This does not augur well for the company because the mind space of the promoters will continue [to be occupied with] fighting each other,” says Ramachandran. “If Bhatia has won this round, the next time Gangwal is not going to keep quiet unless he wants to give up. I think the differences remain.” This sense was apparent when Bhatia said at the AGM that he hoped that Gangwal’s actions would speak louder than his words. While Gangwal did not like the “planted” AGM questions and his character assassination, according to the person quoted earlier, Bhatia, who relished the praise showered upon him, too could say that he was not the first one to go public about the difference of opinion, and it was he who convinced Gangwal to start the airline despite his extreme reluctance. InGovern’s Subramanian’s says in the end, character assassination is not the issue here. “Even if Rahul Bhatia directly character assassinates, that’s also fine. What matters is whether the differences are buried, or they go on forever and one fine day blow up fully, hurting the shareholders.” Indeed, the last word on the IndiGo dispute is still to be spoken, but what seems to be clear is that shareholders are unlikely to get a lucky draw of free tickets. What they might enjoy is the increase in valuation of their stake and the dividends that pour in, thanks partly to the death of Jet Airways. One of the shareholders did shower praise for the INR5-a-share dividend given. “I compliment the board for declaring a handsome dividend even in these turbulent times,” Jehangir Patiwala, who criticised Gangwal and praised Bhatia, said at the AGM. Just that Bhatia never wanted to take IndiGo to the stock market, but it was Gangwal who had put his foot down.
edit - Can read this ET article through this link: https://webcache.googleusercontent.com/search?q=cache:gSOCXmdAWk8J:https://prime.economictimes.indiatimes.com/news/70884923/transportation/was-indigos-agm-stage-managed-shareholders-fawn-over-rahul-bhatia-absent-gangwal-gets-the-raps-+&cd=2&hl=en&ct=clnk&gl=in
Looks like inspite of what Damodaran has said in his interview after the AGM, the attitude of Bhatia in the AGM shows there is no truce.
4 Likes
IndiGo tries to increase the cool quotient before its medium/long haul foray:
On-board, flyers can access Sonyliv content on their phone for Rs 25
First time the airline is thinking about on-board entertainment.
Note that Indigo as per its low cost strategy has not spent a single rupee for this for server/router.
This has been the second time when the management tried to downplay the fight - First was the interview of CEO and latest was the chairman.
1 Like
July international data(yoy)
Indigo -
ASK growth - 78%
Passenger kms growth - 65%
Spicejet -
ASK growth - 56%
Passenger kms growth - 40%
Overall Indian operators intl-
ASK de-growth - (20%)
Passenger kms de-growth - (20%)
2 Likes
Why are airlines not paying taxes. Indigo is paying < 20 and Spicejet Nil. Is there any loss carry forward. Any CA or people with knowledge can help
1 Like
IndiGo promoter Rahul Bhatia & his wife Rohini Bhatia moves London Court of International Arbitration against co-promoter Rakesh Tanggal
Damage claimed for violation of Article of Association & Shareholders Agreement.
The truce was never there…
1 Like
Indigo take 41st spot now among the list of top listed airlines with largest market cap
Among LCC, Indigo is in the 3rd position behind southwest and ryanair.
3 Likes
It would be interesting if the data was presented along with the revenue and margins for each.
Which app is this?
Champions 
1 Like
1066 Crore loss for Indigo in Q2 , hurt by mark-to market losses on operating leases, and higher maintenance costs
https://www.bseindia.com/xml-data/corpfiling/AttachLive/756c7de1-0fab-4711-a6ec-ed4485e66bc3.pdf
Such quarters are why its so difficult to be a investor in Aviation stocks.
Disc : Not invested. Just tracking
1 Like
Did anybody attend the earnings call. Please update the summary.
Thanks in advance
1 Like
Prepared remarks Earnings call transcript - Jul-sep 2019
Earnings Presentation
1 Like
DGCA reviews maintenance, safety data of IndiGo’s Pratt& Whitney-run A320neos
DGCA orders IndiGo not to operate A320neo with PW 1100 series engine of more than 3000 hrs life
DGCA asks IndiGo to get all such A320neos fit with modified low pressure turbine
IndiGo has 16 such aircraft which will have to be refit with modified LPT
DGCA asks IndiGo to get these 16 aircraft refit with modified LPT within 15 days
DGCA to ground affected A320neos of IndiGo if engine replacement does not take place within 15 days
Source: Twitter @awnusharma