IndiGo Shares Trim Most of Early Losses, End Nearly 1% Lower
Shares of InterGlobe Aviation, the parent company of IndiGo, experienced a nearly 1% decline on Thursday following the Competition Commission of India’s (CCI) directive for a comprehensive investigation into allegations of unfair business practices.
Market Performance Highlights
– BSE Performance: The stock plummeted by 3.65% during the day, hitting a low of Rs 4,782.45, but later recovered to close at Rs 4,933.95, a reduction of 0.60%.
– NSE Performance: On the National Stock Exchange (NSE), IndiGo shares finished at Rs 4,932.20, marking a decrease of 0.57%.
– Intra-Day Low: During intra-day trading, the shares fell by 3.63% to Rs 4,780.30.
Reasons Behind the Decline
The CCI’s action came just two months after IndiGo canceled thousands of flights due to operational challenges, severely impacting customers. The commission’s investigation was initiated based on data from the Directorate General of Civil Aviation (DGCA) and additional sources, leading to the conclusion that IndiGo might have abused its dominant market position.
Key Findings from the Competition Commission
– Flight Cancellations: The CCI noted that by canceling a substantial number of flights, IndiGo created an artificial scarcity in the market, thereby limiting consumer access to air travel during the high-demand period.
– Legal Framework: The regulator indicated that this behavior could be seen as a restriction of services under Section 4 (2) (b)(i) of the Competition Act, which addresses the abuse of dominant position.
– Investigation Ordered: The CCI has mandated further examination by its Director General (DG) to assess whether IndiGo’s actions resulted in significant adverse effects on market competition.
Conclusion
The recent developments regarding IndiGo shares underscore the airline’s challenges in navigating regulatory scrutiny following substantial operational disruption. As the investigation unfolds, stakeholders will be keenly observing its implications on market dynamics and the company’s operational strategies.