Indigo posted biggest single-day gain in 16 months

MUMBAI: Shares of IndiGo’s parent InterGlobe Aviation jumped more than 4% – the biggest single-day gain in 16 months – after the Directorate General of Civil Aviation’s fine on the airline for mass flight cancellations in December was considered lower than investors had expected.

The stock rose 4.2% to close at ₹ 4,937 – emerging as the top gainer in the Nifty on Monday. The benchmark Nifty fell 0.4%. This is Indigo’s biggest one-day advance since August 2024.

“The DGCA penalty at ₹22 crore was much lower than expected, prompting investors to buy,” said Sunny Aggarwal, head of fundamental research at SBI Securities. He said that IndiGo has reduced operational capacity to comply with regulations.

In early December, the airline canceled several flights, exacerbated by the enforcement of time limits for crews and the grounding of the A320 fleet due to a software glitch. The disruptions were criticized as thousands of passengers were stranded.

Sonam Srivastava, founder and CEO, Wright Research, said, “IndiGo shares saw a significant correction after the disruption in December, but given the issues with DGCA, it is currently a good company at a bargain price.”

Srivastava said easing supply-side issues and softening crude oil prices are expected to be a tailwind for the company.

Indigo shares are down 13% since the start of December. “Due to disruptions in the peak travel season, the company’s December quarter results are expected to weaken and the company’s operations may be reduced till March,” Agarwal said.