Shares of InterGlobe Aviation, the parent of India's biggest airline IndiGo, dropped on Monday after one of its co-founders resigned from the board last week and said he will trim his stake in the company over the next five years.
The company's shares fell as much as 4.3% and hit a two-week low.
In a letter to the InterGlobe's board on Friday, Rakesh Gangwal said he was stepping down immediately as he didn't want access to unpublished price sensitive information when he begins trimming his stake in the company.
Gangwal and his family own 36.61% stake in InterGlobe, while another co-founder and managing director Rahul Bhatia and his family own about 37.8%.
"I have been a long-term shareholder in the company for more than 15 years and it's only natural to someday think about diversifying one's holdings," Gangwal said in the letter, without divulging how much stake he plans to retain.
Both the co-founders were involved in a spat in early-2020 when Gangwal had sought to modify certain rules in the company's articles of association.
Gangwal, a non-executive director, had alleged violations in corporate governance rules at the parent group and wanted to remove an article that prevented co-founders from buying publicly-listed shares in InterGlobe and potentially trigger an open offer for the rest of the company.
Earlier this month, InterGlobe reported its first quarterly profit in two years and named Bhatia as a managing director.
The airline also said it expects revenue to recover from April this year as demand for travel rebounds from disruption due to the COVID-19 pandemic.
Shares of the company have rebounded 174% up to last close from their March 2020 lows.