Shares of InterGlobe Aviation, the parent of IndiGo, remained under heavy pressure on Monday, extending a sharp sell-off that has wiped out more than Rs 37,000 crore in market value in less than a week, as operational turmoil rattled investor confidence.The stock slid as much as 10% to Rs 4,842 during intraday trade, marking its seventh consecutive session of losses. Over the past six trading days, InterGlobe shares have fallen 16.4%, reflecting growing concerns over the airline’s handling of revised Flight Duty Time Limitations (FDTL) and the cascading impact on costs and earnings, ET reported.The sell-off follows one of the most disruptive phases in Indian aviation, with IndiGo grappling to realign crew schedules under the new FDTL norms. A severe pilot shortage triggered widespread cancellations, culminating in more than 1,000 flights being scrapped on a single day—nearly half of the airline’s daily operations—leaving thousands of passengers stranded across major airports.IndiGo, which commands close to 66% of India’s domestic aviation market, has acknowledged planning gaps in adapting to the new regulations, which cap pilots’ night landings and mandate longer weekly rest periods.The turbulence has led brokerages to cut target prices. UBS maintained a Buy rating on InterGlobe Aviation but lowered its target to Rs 6,350, flagging insufficient preparedness for the FDTL rollout and upward revisions to cost estimates for FY26–FY28. The brokerage also factored in higher crew strength requirements and increased operating expenses due to the rupee’s depreciation.Despite near-term headwinds, UBS said the airline’s long-term growth outlook remains intact, supported by international expansion that offers margin stability and a natural hedge against currency pressures, according to ET.Investec retained its Sell rating with a target price of Rs 4,040, highlighting a sharp rise in costs. The brokerage pointed to aviation turbine fuel prices rising 6% quarter-on-quarter and the rupee weakening to 90 against the dollar. It warned that compliance with updated FDTL norms by February 10, 2026, could require around 20% more pilots per aircraft, potentially increasing costs by Rs 0.10 per ASK and cutting profit before tax by nearly 25% if fares are not raised.Jefferies, which continues to rate the stock Buy, cautioned that IndiGo’s cost curve is turning unfavourable as multiple pressures converge. It flagged higher non-fuel costs linked to operational disruptions, possible regulatory action, and rising dollar-denominated expenses such as fuel, leases and maintenance. Reduced pilot productivity under the new norms is also expected to lift employee costs.Regulatory scrutiny has intensified as well. The Directorate General of Civil Aviation has given IndiGo CEO Pieter Elbers an additional 24 hours to respond to a show-cause notice seeking an explanation for the large-scale disruptions and asking why enforcement action should not be initiated under aviation rules.Despite the steep correction, InterGlobe Aviation shares remain up about 7% on a year-to-date basis, underscoring the tension between short-term disruption risks and longer-term growth expectations.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)

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‘Never been abused like this’

Banks across the Asia–Pacific region are displaying stronger capital health than lenders in the United States and Western Europe, Moody’s said in its latest survey. The agency’s comparison of the largest banking institutions across major markets shows Asia–Pacific banks have accumulated strong capital levels under what it describes as tighter and more cautious regulatory oversight.The survey found that the risk-weighted asset (RWA) profiles of large Asia–Pacific banks correspond closely with their actual credit losses over the past decade, indicating that the risk assigned to their assets reflects the ground reality. At the same time, the report stresses that RWA densities are not uniform across the region and vary by market. RWAs measure the level of risk in a bank’s portfolio by assigning higher weights to assets considered riskier, meaning institutions with higher RWA density have a greater proportion of high-risk assets on their balance sheets.A notable highlight of the study is the capital strength of major private sector banks in India. Moody’s stated, “Large private sector banks in India have high CET1 capital adequacy and leverage ratios because their internal capital generation has outpaced their RWA growth in the past couple of years, and they can raise equity easily from capital markets when needed.” CET1, or Common Equity Tier 1 capital, comprises retained earnings and equity shares and is the core line of defence against losses. Higher CET1 ratios translate to a greater capacity to absorb shocks without affecting depositor safety.By the end of 2024, the average CET1 ratios of large banks in Hong Kong, India and Korea in the sample stood at 18.0%, 14.7% and 14.5%, respectively. These figures stand higher than the 13.5% reported by the four biggest US banks and the 13.8% recorded by the top six banks in Western Europe, according to the report.While Moody’s says Asia–Pacific banks can raise equity from capital markets with relative ease when required, it also notes that state-owned banks remain weaker than their private counterparts on capital and leverage.The agency attributes higher RWA densities in India, Vietnam and some Chinese lenders to the continued use of the standardised approach for calculating risk weights, a method based on fixed regulatory prescriptions rather than banks’ own internal assessments. In India, regulators have announced plans to permit banks to move to the IRB (Internal Ratings-Based) approach by 2028, a transition expected to reduce RWA density if implemented successfully.For India, the sample in the survey consisted of State Bank of India, Axis Bank, ICICI Bank and HDFC Bank, representing roughly half of the country’s total banking system assets. Overall, the report examined 35 banks across eight major Asia-Pacific banking systems, covering 75% of the total assets of all rated banks in these markets.