Snapping three-day losing streak, Jet Airways shares surged over 13 per cent in intraday trade on Tuesday amid strong speculative buying by retail investors on hopes of higher returns. The Jet Airways stocks have slumped over 45 per cent in last three trading session after the airline temporarily suspended operations as it failed to secure emergency funds from the lenders.
Paring previous session losses, the Naresh Goyal-founded airline shares gained as much 13.08 per cent to hit an intra-day high of Rs 174.95 on the National Stock Exchange against the previous close level of Rs 154.60. The analyst sees this move as purely speculative in nature as it is not backed by any fundamental.
In a similar trend, Jet Airways share price rose 11.57 per cent in intraday trade to Rs 172.50 on the Bombay Stock Exchange. The scrip opened a tad higher at Rs 158.80 against the previous closing price of Rs 154.60. Data from BSE showed that there was a surge in volume trade with 31.03 lakh shares changed hand over the counter as compared to the two-week average of 27.16 lakh shares.
The exchange data indicated that foreign portfolio investors (FPIs) and fund houses continue to reduce their exposure to crisis-hit airline. They reduced their stakes in the company to 3.58 per cent and 1.47 per cent, respectively as on March 31, 2019, from 9.65 per cent and 4.96 per cent respectively in the year-ago period, according to a Mint report.
At the same time, retail investors, who traded in lot sizes of less than Rs 1 lakh, increased their stakes in the company to 11.42 per cent as compared to 4.9 per cent as of 31 March 2018, the leading daily reported.
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Jet Airways, which sits on the debt of more than Rs 8,500 crore, has shut down operations temporarily after it failed to secure emergency funds from the lenders. Last week, Jet Airways had asked lenders to release an interim fund of Rs 400 crore which was turned down by the SBI.
In the latest development, the company's Non-Executive Non-Independent Director Nasim Zaidi has submitted his resignations "due to personal reasons and constraints of time". Last week, Independent Director Rajshree Pathy had also resigned from the board of the cash-strapped airline.
Meanwhile, State Bank of India, leader of the seven-member consortium of domestic banks to Jet Airways, has started the bidding process for stake sale in the airline. While banks are hopeful of a successful bidding process, but they are also reportedly looking for resolution outside the insolvency law framework if the bidding for stake sale in the embattled airline does not bear fruit.
Etihad Airways, TPG Capital, Indigo Partners, and National Investment and Infrastructure Fund (NIIF) have reportedly shown interest in buying a stake in Jet Airways. The details of initial bidders are expected to be cleared on May 10. Reports also suggested that billionaire Mukesh Ambani-backed Reliance Industries is also eyeing a stake in the airline.
Also Read: Naresh Goyal's firm had Rs 260 crore cash when financial crunch hit Jet Airways
Edited by Chitranjan Kumar