India’s aviation sector is a tough sky to navigate. Many airlines that once ruled the skies—Kingfisher, Jet Airways, even Air India—have faced turbulence or collapse. Yet IndiGo, founded in 2006, stood out. With a market share of over 60 percent, more than 2,200 flights a day, and a valuation crossing two lakh crore, it became India’s most profitable airline. But now, one of its founding pilots, Rakesh Gangwal, is quietly stepping off the flight deck.

A Measured Exit from the Cockpit

Once holding over 35 percent of IndiGo’s parent company, InterGlobe Aviation, Gangwal began reducing his stake in 2022. Each sale was methodical, from a ₹6,800 crore block sale in May 2025 to another ₹7,000 crore in August. His holdings now stand at less than 5 percent. But the real question remains—why would the architect of IndiGo’s success walk away from such a powerhouse?

The answer lies in a story of partnership, principles, and a fallout over control.

From Takeoff to Tension

Gangwal and Rahul Bhatia built IndiGo as the ultimate case study in efficiency. Gangwal’s expertise in operations and Bhatia’s business acumen made for the perfect combination. But after years of success, cracks appeared beneath the surface.

By 2019, Gangwal accused Bhatia of breaching governance standards. He alleged that through his group company InterGlobe Enterprises, Bhatia exercised undue influence over IndiGo’s operations, with related party transactions and board appointments tilted in his favor. Gangwal wanted cleaner governance and more transparency, but internal talks failed.

He escalated his concerns to SEBI, turning what was once a private disagreement into one of corporate India’s most high-profile founder feuds.

The Arbitration Battle and Aftermath

The dispute reached the London Court of International Arbitration in 2019. The legal wrangle revolved around restrictive clauses that gave both founders veto power over share sales. In 2021, the tribunal ruled in favor of reform—removing these clauses and allowing founders to freely sell shares.

For many investors, this marked a governance victory. For Gangwal, it marked the beginning of his exit. He resigned from the board in February 2022 and announced plans to divest his entire stake over five years. His reason was simple: the structure may have changed, but the culture had not.

Principles Over Profit

Gangwal’s exit wasn’t about market timing or valuation. It was about belief. He no longer trusted how the company was governed. Despite IndiGo’s strong performance, he felt key issues—centralized control, conflict of interest, and limited board independence—remained unresolved.

He didn’t want to fight another battle; he simply wanted to walk away with dignity. His sales through the Chinkerpoo Family Trust were executed quietly, far from headlines, at prices even slightly below market value. The silence said it all.

The Bigger Lesson

Gangwal’s departure from IndiGo isn’t a story of financial loss—it’s a story of philosophical distance. The man who helped build India’s aviation giant decided that success without transparency wasn’t worth the flight.

It’s also a reminder that companies aren’t built on profits alone. They are built on trust, governance, and shared vision. And when those values drift apart, even the strongest partnerships can lose altitude.

 

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