Rakesh Gangwal, co-founder of IndiGo, has quit its board and will pare his stake in the airline over the next five years. The decision comes months after shareholders voted to remove a provision that barred transfer of shares by promoters.

Gangwal has resigned as a non-executive, non-independent director of InterGlobe Aviation — the holding company of IndiGo Airlines — with “immediate effect”, a stock exchange notification by the airlines said.

BusinessLine had in December reported that Gangwal may exit the airline by selling his stake in the low-cost-carrier. 

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Promoter shareholding in IndiGo stands at 74.78 per cent. Gangwal’s stake is listed under the “foreign” category and is at around 14.65 per cent in his individual capacity, while his wife Shobha holds 8.39 per cent. The other foreign shareholder is The Chinkerpoo Family Trust (where Shobha Gangwal and JP Morgan Trust Company of Delware are trustees), which holds 13.57 per cent.

Letter to board members

In his letter to the board members, the IndiGo co-founder said, he continues to be a “big believer in the long term prospects” of the airlines “and more so now with the industry consolidation underway”.

“I have been a long-term shareholder in the company for more than 15 years and it’s only natural to someday think about diversifying one’s holdings,” he wrote in the letter.

To avoid his exposure to any unpublished price-sensitive information, Gangwal said he decided to step down from the board.

“Accordingly my current intention is to slowly reduce my equity stake in the company over the next five plus years. While new investors should benefit from the potential future growth of the company’s share price, a gradual reduction in my stake should also allow me to benefit from some of the upside,” he wrote.

The decision comes little over a month after shareholders of InterGlobe Aviation voted to remove curbs on sale of shares by co-founders. That completed the settlement between the feuding founders. Co-promoter Rahul Bhatia will take over the newly-created executive position of managing director at the company.

Gangwal however said that he might consider participating again as board member some time in the future.