Shares of SpiceJet Ltd fell sharply during late deals on Tuesday after the airline announced its second-quarter results. The stock tanked 8.70 per cent to hit a day low price of Rs 55.30 over its previous close of Rs 60.57. It eventually settled 4.18 per cent lower at Rs 58.04.
The budget carrier said it has narrowed its net loss to Rs 428 crore in Q2 FY24 as against a loss of Rs 835 crore in the year-ago period. Although, its revenue declined nearly 30 per cent to Rs 1,348 crore in the three months to September 30, 2023.
"The July-September quarter has historically been a challenging period for the aviation industry. This year, the challenges were further compounded by elevated fuel prices, impacting operational costs. SpiceJet, however, has been proactive in implementing cost-saving measures and remains focused on adapting to the dynamic market conditions," SpiceJet CMD Ajay Singh said.
Further, the low-cost airline said it would raise Rs 2,250 crore through the issue of preferential shares and warrants as the troubled airline seeks to return operations to full capacity after the grounding of about a fourth of its fleet.
It would issue shares worth Rs 1,600 crore and warrants convertible to shares worth Rs 650 crore. The issue price per share has been fixed at Rs 50.
The airline continues to explore avenues for growth and profitability in the evolving market and the fresh infusion of over Rs 2,250 crore would bring renewed energy to adapt to the changing circumstances, Singh underscored.
The proposed preferential issues comprise of investors like Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund and more.
On technical charts, the counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 73.11. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a negative price-to-equity (P/E) ratio of 8.13 against a negative price-to-book (P/B) value of 0.70. As of September 2023, promoters held 56.53 per cent stake in the airline.
Also read: InoxCVA IPO grey market premium remains firm; management sees strong growth in two segments
Also read: Hot stocks on December 12: IREDA, Safari Industries, Titagarh Rail, YES Bank and more