Aviation scrips see even flying as Jet concludes Etihad deal

At one point of the day, counter of Jet Airways saw a strong take-off as shares jumped 3.6% to Rs 337.60 against previous close of Rs 325.75

Aviation stocks were largely unaffected in a tumbling market for most of the trading session on Thursday. On a day when benchmark indices remained weak and closed about two per cent lower, shares of Jet Airways and SpiceJet, the two listed and operating companies, were firm and remained above Wednesday’s closing price.

At one point, SpiceJet had climbed as much as 2.3 per cent to Rs 18.1 and Jet by 3.6 per cent; However, during the last half an hour of trade, there was a decline in indices and SpiceJet failed to close in the green. It closed at Rs 17.65 and Jet eventually ended with a marginal decline of 0.1 per cent.

Conclusion of the 24 per cent stake sale to Etihad Airways on Wednesday had initially sent the Jet counter flying. On the National Stock Exchange, close to 2.1 million shares exchanged hands on the Jet counter. The scrip of Sun Group’s SpiceJet was also active. On the BSE, the exchange where it is listed, 4.6 million shares of the company exchanged hands. The deal value was Rs 2,057 crore. Jet has also approved the spinoff of its frequent flyer programme into a separate subsidiary. Etihad will hold 50.5 per cent in the frequent flyer programme and invest $150 million.

On Wednesday, the Jet Airways board approved a preferential issue of 27.26 million equity shares to Etihad at Rs 754 a share, at a premium.

After the transaction, promoter-chairman Naresh Goyal’s stake in the airline stands at 51 per cent. Public and institutional investors hold 25 per cent (Etihad has been treated as a public shareholder). With the investment, Jet’s share capital has risen from Rs 86 crore to Rs 113 crore (the premium amount has been transferred to the reserve).

On the National Stock Exchange, close to 2.1 million shares exchanged hands on Jet’s counter.

The scrip of Sun Group’s SpiceJet was also active. On the BSE, the exchange where it is listed, 4.6 million shares of the company exchanged hands. Against Wednesday’s close of Rs 17.70, the stock once touched a high of Rs 18.1 or 2.3 per cent. However, during the last half an hour of trade, there was a decline in indices and SpiceJet failed to close in the green. It closed at Rs 17.65, down 0.3 per cent. It had hit a 52-week high of Rs 50.9 in December last year.

Amid all this, even shares of grounded Kingfisher Airlines touched an intra-day high of Rs 5.5, two per cent up, before losing all its gains by the close of trading.