Interglobe Aviation , the operator of India's largest airline IndiGo, is set to witness a significant stake sale by its promoters. Co-founder Rakesh Gangwal and the Chinkerpoo Family Trust are planning to offload shares worth Rs 7,027.70 crore through a block deal, representing a 3.1% stake in the company.

Block Deal Details

The block deal is being managed by global investment banks Goldman Sachs, JPMorgan, and Morgan Stanley.

Promoter Shareholding

Currently, the promoters hold a 7.8% stake in Interglobe Aviation:

• Rakesh Gangwal: 4.73%
• Chinkerpoo Family Trust: 3.08%

Gangwal's Stake Reduction Plan

Rakesh Gangwal, who resigned from the company's board in February 2022, had previously announced his intention to gradually reduce his stake over a five-year period. Since then, he has raised approximately Rs 45,300.00 crore from various stake sales. After this transaction, Gangwal's remaining 4.78% stake is valued at around Rs 11,169.00 crore.

Stock Performance

Interglobe Aviation's stock has shown strong performance over the past year:

• Closed at Rs 6,050.00 (1.08% lower)
• 12-month gain: 28.19%
• Year-to-date gain: 32.84%

Analyst Recommendations

Out of 25 analysts covering the stock:

• 20 recommend 'Buy'
• 3 suggest 'Hold'
• 2 advise 'Sell'

The consensus price target stands at Rs 6,349.83, indicating a potential upside of 5% from the current levels.

This block deal represents a significant movement in Interglobe Aviation's ownership structure and may attract investor attention given the company's strong market position in India's aviation sector.

In a surprising turn of events, two Airbus A321neo aircraft previously operated by Interglobe Aviation , India's largest airline under the brand IndiGo, are being dismantled in Spain after just six years of service. This development highlights the ongoing supply chain disruptions affecting the aviation industry and raises questions about the lifecycle management of modern aircraft.

Early Retirement

The two A321neo aircraft, delivered new to IndiGo in 2019, were originally expected to have a service life of 20-25 years. However, they were returned to UK-based lessor Deucalion Aviation in February when their lease agreement expired. Subsequently, aftermarket specialist Setna iO acquired the aircraft for dismantling in Castellon, Spain.

Financial Logic Behind the Decision

The decision to dismantle these relatively young aircraft is driven by compelling financial considerations:

• Part-out Value: Each aircraft's dismantled parts are estimated to be worth between ₹373.00 crore to ₹468.00 crore ($45-56.5 million).
• Engine Value: The engines alone are valued at ₹126.00 crore to ₹177.00 crore ($15.2-21.4 million) each.
• Current Market Value: In contrast, the entire aircraft's current market value is approximately ₹356.00 crore ($43 million).

This significant disparity between the value of parts and the whole aircraft has led to the unusual decision to dismantle planes that would typically remain in service for many more years.

Industry-wide Supply Chain Challenges

The dismantling of these young aircraft occurs against the backdrop of ongoing supply chain disruptions that are impacting aircraft production and maintenance globally. These challenges are particularly acute for the A320neo family, which includes the A321neo.

Implications for Airlines

Airlines worldwide, including IndiGo, are facing difficulties in sourcing spare parts for their fleets. This situation has led to:

1. Increased demand for serviceable parts from dismantled aircraft.
2. Potential changes in fleet management strategies.
3. Possible reconsideration of aircraft leasing and ownership models.

As the aviation industry continues to navigate these challenges, the early retirement and dismantling of young aircraft may become a more common occurrence, reflecting the complex interplay between aircraft values, parts availability, and operational needs in a disrupted global supply chain environment.

While Interglobe Aviation has not commented specifically on this development, it underscores the dynamic nature of fleet management decisions in the current aviation landscape. As airlines worldwide adapt to these challenges, the industry will be watching closely to see how such strategies evolve and impact long-term fleet planning and operational efficiency.