SpiceJet Stock Tanks 11% After Reports Of Rakesh Gangwal Denying Stake Acquisition

Reports of Gangwal considering buying a stake in SpiceJet on October 13 sent SpiceJet’s shares soaring by nearly 20 per cent

Spicejet stocks declined over 11 per cent on Monday after Rakesh Gangwal of IndiGo dismissed the reports claiming that he is looking to acquire a stake in debt-laden aircraft. Reports of Gangwal considering buying a stake in SpiceJet on October 13 sent SpiceJet’s shares soaring. The stock had zoomed nearly 20 per cent during the day on claims that the former IndiGo promoter is looking to commit to a stake acquisition in the debt-ridden company.

However, after bankers close to Rakesh Gangwal rubbished the claim, stating that he was not remotely interested in making an investment in SpiceJet, the stock plunged on October 16.

Spicejet shares recovered mildly in noon deals, and at 12:35 pm, the stock was trading at Rs 39.79 on NSE, down 8 per cent from the previous day’s closing.

Gangwal is reportedly upset since the rumours "misguided" retail investors, according to the banker. He is even considering requesting market regulator Sebi to probe into the matter, the banker added. As of June 2023, Rakesh Gangwal and his wife Shobha Gangwal hold 13.23 per cent and 2.99 per cent stake, respectively, in IndiGo operator InterGlobe Aviation. Meanwhile, their Chinkerpoo Family Trust holds a 13.5 per cent stake in the airline, according to exchange data. Gangwal is, however, in the process of exiting the carrier.

Cash-strapped SpiceJet, which is "struggling to stay afloat", has been scrambling to raise funds and restore operations for about a fourth of its fleet that has been grounded amid fierce competition in the sector. 

In the past six months, SpiceJet stock has rallied 24.51 per cent, outperforming the benchmark Nifty 50. Despite the recovery in the stock in the last six months, it is trading below its 52-week high of Rs 43.30, hit in December 2022.

For the April-June quarter, SpiceJet logged a net profit of Rs 205 crore, compared with a loss of Rs 789 crore in the corresponding quarter of last year because of strong air travel demand. It also registered the industry's highest domestic load factor of 90 per cent in the June quarter.