What Caused the Fall in Indigo Share Prices? | CORPORATE ETHOS

What Caused the Fall in Indigo Share Prices?

By: | May 4, 2018

May 4: InterGlobe Aviation Ltd (BSE: 539448, NSE: INDIGO) shares have fallen from 1499 levels to 1348 levels in a short span of 10 days.  It was widely reported in the media that market regulator Securities and Exchange Board of India (SEBI) had ordered a probe to ascertain whether insider trading norms were violated with respect to the scrip.

The share prices had fallen 6% on April 27 before the airline announced the resignation of its President Aditya Ghosh.

However, InterGlobe Aviation has clarified to stock exchanges that they had not done anything unusual for the stock prices to fall steeply on April 27. The company said that resignation of Aditya Ghosh as President and Whole Time Director of the company was received on April 26. It was addressed to the Board of Directors.

On receipt of his resignation letter, a Board meeting was held on an urgent basis on April 27, 2018 to consider his resignation. The Board accepted the resignation of Aditya Ghosh from the post of President with effect from July 31, 2018 and as a Director of the company with effect from April 26, 2018.

Shortly afterwards, the company informed the stock exchanges well within the timelines prescribed by the listing regulations, Indigo said in a clarification.

The company dismissed media reports that SEBI had sought clarification in this regard from the company.

On Friday trading,  IndiGo shares fell 1.68% to Rs 1185.55 as against previous close of Rs 1205. It is trading at a PE of 20.41 while technical charts indicate bearish trend for the scrip with RSI of 24.74 and MACD witnessing a bearish crossover. Q4FY18 results had shown net profits fall 73.28% to Rs 117.64 cr while sales rose 19.61% to Rs 5799.11 cr.

it is not yet clear what caused the sudden fall in prices, although weak Q4 results and outlook for next quarters may have influenced the price movements.