NEW DELHI: Share prices of Interglobe Aviation, the parent company of India's largest airline IndiGo, plunged 8 percent intraday in Monday’s trading session. The crash follows the airline receiving a show-cause notice from the aviation regulator DGCA amid speculation that the government may take stern action against the carrier for the mass inconvenience caused to passengers.
IndiGo's share price fell to hit a low of Rs 4,941 apiece on the NSE as of 12.05 pm. The stock is declining for the seventh consecutive day since the airline started cancelling a large chunk of its daily flights, leaving passengers stranded at airports and prompting the government to intervene.
Aviation watchdog DGCA on Saturday issued a show-cause notice to IndiGo CEO Pieter Elbers seeking an explanation for the massive flight disruptions. In the notice, the regulator said the large-scale operational failures indicate significant lapses in “planning, oversight and resource management”, and a failure to adequately prepare for new Flight Duty Time Limitations (FDTL) norms. The CEO has been asked to reply by 6 pm on Monday.
IndiGo, India's largest airline, has reportedly cancelled more than 4,500 flights since last Tuesday. The cancellation is attributed to sharp shortage of crew, especially pilots, following the introduction of revised FDTL norms, which mandate more rest hours, last month.
Global brokerage Investec maintained its 'Sell' rating on the stock with a price target of Rs 4,040, warning that hopes of a strong third-quarter recovery are diminishing after a weak first half of FY26. It stated that costs are rising sharply for the airline, with ATF prices up 6 percent quarter-on-quarter and the rupee sliding to 90 per dollar. The subsequent wave of flight cancellations has further eroded expectations of an earnings rebound.
With IndiGo required to fully comply with the updated norms by February 10 2026, the airline may need about 20 percent more pilots per aircraft, a shift that could raise costs by Rs 0.10 per ASK and, without fare hikes, potentially shave off nearly 25 percent of profit before tax, stated Investec.
JM Financial kept a 'Reduce' call on the stock, with a target price of Rs 5,570 apiece. "The recent incident is likely to lead to a higher CAGR in CASK ex-fuel-ex-forex in future years subject to regulatory actions," it said.
Two global brokerages-Jefferies and UBS remain bullish on the airline’s long-term growth prospects. Jefferies kept a 'Buy' call on the stock, with a target price of Rs 7,025 per share. UBS kept its 'Buy' call but reduced its target price for the stock to Rs 6,350 per share.