SpiceJet jumps on stake-sale buzz

SpiceJet rose 4.35% to Rs 26.40 at 11:00 IST on BSE on a media report that the company is in fresh talks with private equity firms, a foreign airline and an Indian conglomerate to raise funds for expansion.

Meanwhile, the S&P BSE Sensex was down 134.24 points, or 0.72%, to 18,598.80.

On BSE, 18.18 lakh shares were traded in the counter as against an average daily volume of 25.79 lakh shares in the past one quarter.

The stock hit a high of Rs 27.35 and a low of Rs 26.20 so far during the day. The stock had hit a 52-week high of Rs 50.90 on 7 December 2012. The stock had hit a 52-week low of Rs 24.15 on 31 July 2013.

The stock had underperformed the market over the past one month till 6 August 2013, sliding 8% compared with the Sensex's 3.91% fall. The scrip had also underperformed the market in past one quarter, sliding 38.74% as against Sensex's 4.78% fall.

The small-cap low-cost air carrier has an equity capital of Rs 520.28 crore. Face value per share is Rs 10.

According to the report, SpiceJet is in talks with private equity funds, an Oman-based sovereign wealth fund and foreign airlines as well as an Indian conglomerate for selling a minority stake to fund its expansion plans. SpiceJet has started fresh rounds of talks, but is yet to finalize any deals, report added.

Separately, some media reports suggested that SpiceJet is in active discussions with Singapore-based budget carrier Tigerair for a possible stake sale even as they are set to sign a code share agreement soon. Reports added that SpiceJet promoter and media baron Kalanithi Maran may offload up to 24% to Tigerair.

In July 2013, some media reports had suggested that Kuwait Airways was looking to pick up a nearly 25% stake in SpiceJet. However, SpiceJet later clarified that the news reports were speculative in nature.

A foreign airline can start a new airline with a 49% stake in an Indian company that is 51% owned by local investors, the government announced in September 2012 as part of a liberalization drive. Earlier, foreign airlines were not allowed to pick up equity in aviation companies, while foreign investors and financial institutions could hold up to a 49% stake.

On 3 August 2013, the company informed that its chief executive officer, Neil Raymond Mills, had resigned from the company.

Net profit of SpiceJet declined 9.96% to Rs 50.56 crore on 19.57% rise in net sales to Rs 1688.48 crore in Q1 June 2013 over Q1 June 2012. The result was announced during trading hours on Monday, 5 August 2013.

The average passenger yields in the quarter increased by 5% as compared to the corresponding quarter a year ago. Domestic market share in June 2013 increased to 19.50% from 18.60% in June 2012.

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