Tag: Rahul Bhatia

Rahul Bhatia’s net worth rises $1 bn in two months as IndiGo shares climb to record

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The fortune of Rahul Bhatia, co-founder of InterGlobe Aviation, swelled by $1 billion in just two months, after renewed interest at airlines counter bolstered IndiGo’s shares to a fresh-life time high.

Shares of InterGlobe Aviation have rallied as much as 32 percent from March end to hit a record high of Rs 2,418.50 on the NSE. In comparison, the benchmark Nifty50 surged less than 10 percent during the same period.

Analysts are of the view that the latest financial troubles at rival Go Air is likely to improve sales and market shares of InterGlobe Aviation in the coming quarters.

Additionally, the fall in crude oil prices also bodes well with the industry. The Brent, which is hovering at $75 per barrel, has fallen as much as 14 percent from its April highs. Aviation turbine fuel, a derivative of crude oil, forms a major chunk of airlines’ operating expenses.

According to Jefferies, the passenger volume of IndiGo for FY23 was 86 million and the company expects volumes to reach 100 million for FY24.

“FY24 has started on positive note for IndiGo with crude slide sustaining and competitor Go Air suspending operations, creating sudden industry supply shortage,” wrote Jefferies in an investor note.

The foreign brokerage also increased FY24 EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate 29 percent to reflect “changed scenario” in the industry.

According to Bloomberg billionaires index, Rahul Bhatia, who occupies 22nd rank among Indian billionaires possess a net worth of $5.31 billion as of June 05, against $4.28 billion at the end of March 2023.

The majority of Bhatia’s fortune is derived from his 38 percent stake in InterGlobe Aviation. Moreover, his stake is held directly, through family members and holding companies.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rohini Bhatia, wife of IndiGo Co-Founder Rahul Bhatia, quits board

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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InterGlobe Aviation, the parent of the country’s largest airline IndiGo, on July 8 said Rohini Bhatia, a non-executive, the non-independent director, has resigned from the board of directors of the company.

Rohini Bhatia is the wife of Rahul Bhatia, IndiGo Co-Founder, and Promoter, and had joined the board in 2019.

“…we hereby inform you that Rohini Bhatia, a Non-Executive, Non-Independent Director has tendered her resignation from the Board of Directors of the Company due to other engagements, with effect from July 11, 2022,” the low-cost carrier said in an exchange filing.

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According to the IndiGo website, Rohini Bhatia is the chairperson of the CSR committee of the company. She is also the chairperson of InterGlobe Foundation, the philanthropic arm of InterGlobe Group.

Rohini Bhatia has a diploma in textile designing and serves as a director on the boards of several InterGlobe Group companies.

Recently, IndiGo said it will increase salaries by 8 percent with effect from August 1. This comes after 55 percent of IndiGo’s domestic flights were delayed after a significant number of cabin crew members took sick leave.

ALSO READ: Aviation giant Safran to set up its largest facility for engine maintenance and repair in India

The airline had introduced a 28 percent cut in salaries of pilots in 2020 citing a poor revenue environment due to the pandemic. The salaries were partially restored when the largest airline in India announced an 8 percent hike in April this year. The latest step will help in the 16 percent restoration of salaries for pilots.

The airline further told the pilots that another 6.5 percent restoration in salaries will be implemented from November 1 “based on the environment.” The airline had recently reinstated layover and deadhead allowances with effect from July 1.

Shares of IndiGo ended at Rs 1,675.10, down by Rs 16.65, or 0.98 percent on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IndiGo to seek shareholders’ nod for Rahul Bhatia’s appointment as MD

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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InterGlobe Aviation will seek shareholders’ approval for the appointment of co-founder Rahul Bhatia as the Managing Director as well as for availing advisory services from Non-Executive Director Gregg Albert Saretsky. The remote e-voting process for the shareholders will be open from February 17 till March 18, according to a regulatory filing on Wednesday.

The results of the postal ballot will be declared on or before March 20. On February 4, InterGlobe Aviation — parent of the country’s largest airline IndiGo — announced the appointment of Bhatia as the Managing Director with immediate effect.

Bhatia “shall not draw any remuneration from the company during his tenure as the Managing Director”, as per the postal ballot notice. He will receive benefits, amenities and perquisites to which he is entitled as per the rules of the company as applicable from time to time, it added.

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Another proposal is for availing advisory services from Saretsky in the capacity as “Special Advisor and payment of remuneration to him up to USD 70,000 per month for the said services from February 5, 2022 till March 31, 2023.”

For the three months ended December 2021, IndiGo posted a profit after tax of Rs 129.8 crore. It had a loss of Rs 620.1 crore in the year-ago period. Reflecting signs of slow recovery in the pandemic-hit airline industry, IndiGo’s revenue from operations jumped to Rs 9,294.8 crore in the latest December quarter compared to Rs 4,910 crore in the same period a year ago.

Total income surged 84.3 percent on an annual basis to Rs 9,480.1 crore in the third quarter of the current fiscal year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IndiGo appoints Co-founder Rahul Bhatia as Managing Director

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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InterGlobe Aviation on Friday announced the appointment of its Co-founder Rahul Bhatia as the company’s Managing Director with immediate effect. The company is the parent of the country’s largest airline IndiGo.

Bhatia is the Co-founder and Promoter of InterGlobe Aviation. The board of directors, during its meeting on Friday, unanimously approved the appointment of Bhatia as the managing director with immediate effect, subject to the approval of the shareholders, according to a statement.

Bhatia said his agenda would be transformational and would focus on expanding the airline’s presence in India and in international markets and building for the long term. IndiGo Chairman Meleveetil Damodaran said the move will further strengthen the airline in the years ahead. Bhatia would oversee all aspects of the airline, and actively lead the management team, he added.

Also Read: IndiGo Q3 results: Net profit at Rs 128.4 crore, beats estimates

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IndiGo EGM concludes, result in 2 days; CEO Rono Dutta assures stronger recovery

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The extraordinary general meeting (EGM) of InterGlobe Aviation (the parent of IndiGo), the country’s largest low-cost airline, concluded Thursday. The promoters of IndiGo Rakesh Gangwal and Rahul Bhatia had called the EGM to propose amendments to the carrier’s Articles of Association (AoA) that would resolve the issues between the two. The shareholders in the EGM were required to vote on it. The result of the EGM voting that took place via video conferencing would be uploaded within two working days.

Meanwhile, IndiGo CEO Rono Dutta has said while the Omicron variant has softened future bookings, the company is on its way to recovery. He added the company will emerge stronger after the two turbulent years due to the coronavirus pandemic.

The EGM had proposed to remove some clauses like the right of first refusal and tag-along from the AoA. These clauses are a key point of friction between the company’s founders Rakesh Gangwal and Rahul Bhatia. The removal of the right of refusal will allow either promoter to sell or transfer their shares to a third entity without giving notice to each other. Some experts consider this EGM may signal a truce between Bhatia and Gangwal. Both the promoters collectively own 74.44 percent of the paid-up equity share capital in the company. Earlier in 2019, Gangwal alone had called an EGM to amend the AoA.

The conflict

Bhatia and Gangwal had founded IndiGo in 2006 and held nearly 99 percent of the stake before its listing in 2013. As of March 31, 2021, Gangwal owned a 37 percent stake in the company, while Bhatia owned about 38 percent.

The dispute began in May 2019 when Gangwal accused Bhatia of making unfair deals between InterGlobe Aviation and Bhatia Group entities. He flagged unusual rights that gave Bhatia more control over the board and allegedly led to governance failures. He also flagged instances of lack of approval of audit committee in some cases, lack of competitive bidding, and backdating contracts. When board Chairman M Damodaran reviewed the InterGlobe’s related party transactions, he found some were not approved by an audit committee.  These related party transactions had increased to Rs 315 crore in FY18 from Rs 30 crore between 2010-11 and 2017-18.

Further, the two founders also diverge on IndiGo’s strategy for growth. While Gangwal is said to favour an aggressive growth route, Bhatia favours a slow approach.

The feud between the co-founders had turned legal and reached the Delhi High Court in October. Before that, both of them had battled against each others’ claims at the London Court of International Arbitration (LCIA).

IndiGo shares that were earlier down over 1 percent at Rs 1,984, recovered a bit. At the last count, shares were up to Rs 1,991. Meanwhile, Sensex was up over 0.3 percent to 57,994.

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Crucial IndiGo EGM today; here’s what is on agenda

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s top aviation company IndiGo will hold a crucial extraordinary meeting today. Shareholders are likely to take a decision on amending the company’s Articles of Association which has been a key point of friction between the company’s Founders Rahul Bhatia and Rakesh Gangwal.

The EGM has been called to make several changes to the AOA, which also include the removal of a clause which gives the promoters, Bhatia and Gangwal, the right of first refusal over the acquisition of each other’s shares. A removal of this clause will allow either side to sell or transfer shares to a third entity without giving notice to each other.

Some officials say that this EGM may signal a truce because this has been called after joint requisition by both promoters and that there will be more clarity after the EGM. The legal tussle between the two promoters who own around 75 percent of the largest Indian airline became public in July 2019; the corporate battle even reached the London Court of Arbitration and recently in October, Gangwal had approached the Delhi High Court for enforcement of the London award.

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Explained: IndiGo promoters’ dispute and why Rakesh Gangwal’s plea was not allowed by Delhi High Court

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Delhi High Court on Friday refused to allow the plea filed by IndiGo promoter Rakesh Gangwal a day earlier against co-promoter Rahul Bhatia to enforce the arbitration award given by the London Court of International Arbitration in the feud between the two promoters. The court said Bhatia is likely to challenge the award.

The High Court also allowed Gangwal to pay damages of $25,000 as directed in the arbitral award.

The arbitral award given in September was held in favour of Gangwal and has directed for removal of Articles of Association (AoA) that restricts the transfer of shares. It has also directed for an extraordinary general meeting (EGM) to be held and requires Gangwal and Bhatia to arrive at a consensus on a resolution for the removal of restrictions on the transfer of shares.

In his plea to the HC, Gangwal sought draft resolutions from Bhatia on the removal of transfer restrictions under AoA. The court, however, said that 90 days period for challenging the award is not over, and therefore, Bhatia can’t be made to act on the award. It also noted that Bhatia will prefer a challenge to the award.

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IndiGo and Bhatia too clarified that they will be challenging the arbitral award. “IndiGo was not a party to the dispute but is facing consequences of the arbitral award. Award can’t be enforced in this fashion (as sought by Gangwal),” Bhatia’s counsel told the court.

What is the IndiGo promoters’ dispute all about?

*In July 2019, Rakesh Gangwal wrote to the Prime Minister’s Office (PMO) and the Securities and Exchange Board of India (SEBI) flagging corporate governance issues at IndiGo.

He had red-flagged transactions between IndiGo and Bhatia’s InterGlobe Enterprises Private Limited (IGE), the airline’s parent company, non-independence of the chairperson, and the refusal to call an EGM.

Gangwal sought modification to the Articles of Association clipping powers of Bhatia.

*Bhatia denied all the allegations and the IGE group said that there is absolutely no evidence regarding the questionable third-party transactions between IGE and IndiGo.

Also Read | Indigo EGM: Gangwal and Bhatia’s boardroom battle Continues with no resolution in sight 

*In October 2019, IndiGo and Rahul Bhatia initiated arbitration proceedings against Gangwal.

*According to a BSE filing by IndiGo, the IGE group had sent a request for arbitration on October 1, 2019, to the London Court of International Arbitration, India under a shareholder’s agreement dated April 23, 2015 (amended on September 17, 2015).

*Gangwal has been seeking to remove AOAs on – 1. Right of First Refusal;  2. Tag-Along Rights Clause

In January 2020, Gangwal had floated a special resolution to amend the AOA and to remove these two clauses.

Gangwal’s special resolution was defeated, with 51.44 percent of shareholders voting against it.

*IndiGo, in its filing said, “In the arbitration proceedings, the IGE group sought certain reliefs against the RG group, including in relation to compliance with shareholders agreement and company’s articles of association (articles) as well as damages.”

*Gangwal was re-appointed as a director of IndiGo on August 31, 2021. Though almost one-third of public institutional investors rejected the re-appointment, the resolution was passed as promoters, non-institutional investors and other institutional investors voted in favour.

*On September 23, the London Court of International Arbitration gave the final award in the proceedings initiated by Bhatia against Gangwal. Both parties were granted 90 days to enforce the order.

Also Read | IndiGo’s parent company receives arbitral award in proceedings against co-founder Rakesh Gangwal 

*On Oct 7, Gangwal moved to the Delhi High Court and sought an urgent hearing to enforce the arbitration award. The court, however, has refused to entertain the plea as the 90 days for challenging the award is not over yet.

*As of June 2021, Gangwal Group holds a 36.63 percent share and Bhatia’s lnterGlobe Enterprises Private Limited holds a 38.2 percent stake in IndiGo.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Delhi high court refuses to allow Rakesh Gangwal plea seeking to enforce arbitration award by a London court

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Delhi high court on Friday refused to allow a plea moved by IndiGo co-promoter Rakesh Gangwal seeking to enforce an arbitration award that was awarded by the London Court of International Arbitration. The court said that the directions sought by Gangwal are tantamount to enforcement, and can’t be allowed at this stage. The court asked Gangwal to make the payment of damages of $25,000.

Meanwhile, the counsel of InterGlobe Enterprises Private Ltd’s (IGE’s) co-promoter Rahul Bhatia said that Indigo will challenge the arbitral award.

Harish Salve, appearing for Gangwal, said, “I have an enforceable award. Award asks for both sides should jointly take action to remove restrictions under Articles of Association.”

“Seeking to requisition for an EGM, we are inviting draft resolutions. We have to agree to the term of the resolutions that have to be passed. If they do not challenge this verdict, at least this process can be finished. There is no tearing hurry, let us begin this exercise.”

Senior advocate Abhishek Manu Singhvi, appearing for Bhatia, said “Rakesh Gangwal is seeking to enforce the award in this fashion. He is trying to pay the damages of merely $25,000, we’ll accept it. We have 90 days to consider legal options, we may consider a challenge.”

“Indigo was not a party to the dispute but is facing consequences of the arbitral award. Award can’t be enforced in this fashion.”

Gangwal on Thursday moved the court to enforce the arbitration award. Earlier on September 23, the London Court of International Arbitration gave the final award in the proceedings initiated by Bhatia against Gangwal. Both parties were granted 90 days’ time to enforce the order.

In a filing on the Bombay Stock Exchange (BSE) on September 24, IndiGo had said that no directions have been given to the company. However, directions were issued to both RG Group and the IGE Group, IndiGo’s parent company, in relation to the relief sought by them against each other.

IndiGo said that the award also directs the reimbursement of the costs incurred by the company in relation to the arbitration by the IGE Group.
However, Gangwal moved the high court before the deadline and also agreed to enforce the orders before the 90-day period.

According to IndiGo’s BSE filing last month, the IGE group had sent a request for arbitration on October 1, 2019, to the London Court of International Arbitration, India, under a shareholders’ agreement dated April 23, 2015 (amended on September 17, 2015). The IGE group had sought certain reliefs against the RG group, including compliance with shareholders agreement, the company’s articles of association (articles) and damages.

As of June 2021, Gangwal Group held 36.63 percent share and Bhatia’s lnterGlobe Enterprises Private Ltd holds a 38.2 percent stake in IndiGo.

The legal tussle between Bhatia and Gangwal, the two promoters of IndiGo, began on July 8, 2019, when Gangwal wrote to the Securities and Exchange Board of India (SEBI), the Prime Minister’s Office, and to the Finance Ministry seeking intervention in several corporate governance issues and Bhatia Group’s control on the airline.

Gangwal had asked for an amendment in the Article of Association of the company to remove the rights of IGE Group on the airline. He had also raised issues regarding third-party transactions, non-independence of the present chairman, and refusal to hold extraordinary general meetings (EGM).

In response, the IGE group had said that there is absolutely no evidence regarding the questionable third-party transactions between IGE and the airline.

Gangwal was re-appointed as a director of IndiGo on August 31, 2021. Though nearly one-third of public institutional investors rejected the re-appointment, the resolution was passed as promoters, non-institutional investors and other institutional investors voted in favour.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rakesh Gangwal drags IndiGo to Delhi High Court in arbitral dispute; hearing today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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IndiGo’s promoter Rakesh Gangwal on Thursday moved the Delhi High Court to enforce an arbitration award that was given by the London Court of International Arbitration. The court will take up the plea on Friday at around 11 a.m.

Earlier on September 23, the London Court of International Arbitration gave the final award in the proceedings initiated by InterGlobe Enterprises Private Limited’s (IGE’s) co-founder Rahul Bhatia against the other founder Rakesh Gangwal. Both parties were granted 90 days’ time to enforce the order.

In a filing on the Bombay Stock Exchange (BSE) on September 24, IndiGo had said that no directions have been given to the company. However, directions were issued to both RG Group and the IGE Group, IndiGo’s parent company, in relation to the relief sought by them against each other.

IndiGo said that the award also directs the reimbursement of the costs incurred by the company in relation to the arbitration by the IGE Group.

However, Gangwal moved the Delhi High Court before the deadline and also agreed to enforce the orders before the 90-day period.

According to IndiGo’s BSE filing last month, IGE group had sent a request for arbitration on October 1, 2019, to the London Court of International Arbitration, India, under a shareholder’s agreement dated April 23, 2015 (amended on September 17, 2015). The IGE group had sought certain reliefs against the RG group, including compliance with shareholders agreement, the company’s articles of association (articles) and damages.

As of June 2021, Gangwal Group holds 36.63 percent share and Bhatia’s lnterGlobe Enterprises Private Limited holds 38.2 percent stake in IndiGo.

The legal tussle between Bhatia and Gangwal, the two promoters of IndiGo, began on July 8, 2019 when Gangwal wrote to the Securities and Exchange Board of India (SEBI), the Prime Minister’s Office, and to the Finance Ministry seeking intervention in several corporate governance issues and Bhatia Group’s control on the airline.

Gangwal had asked for amendment in the Article of Association of the company to remove the rights of IGE Group on the airline. He had also raised issues regarding party transactions, non-independence of the present chairman, and refusal to hold extraordinary general meeting (EGM).

In response, IGE group had said that there is absolutely no evidence regarding the questionable third-party transactions between IGE and the airline.

Gangwal was re-appointed as a director of IndiGo on August 31, 2021. Though almost one-third of public institutional investors rejected the re-appointment, the resolution was passed as promoters, non-institutional investors and other institutional investors voted in favour.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow