Jet Airways share price slumps over 23% on report NSE to remove stock from F&O trading from June 28

Jet Airways share price slumped in early trade today after NSE said shares would be pulled out of Futures and Options trading from June 28. Jet Airways share price slumped over 23%  to 84.80 level compared to the previous close of 110.40 on BSE. Jet Airways share opened at a loss of 9.96% at 99.40 and fell to a fresh 52-week low of 84.80 on BSE.

Its market capitalisation fell to Rs 986.03 crore with 15.61 lakh shares changing hands on BSE. The stock has been losing for the last nine days and fallen 40.30% in the period.

Jet Airways crisis: Mumbai court to hear insolvency petitions against airline

Jet Airways share price has lost 77.48% during the last one year and fallen 68.22% since the beginning of this year.

The stock is trading below its 50-day and 200-day moving averages of 142.81 and 224.15 level.

The National Stock Exchange of India (NSE) said shares of Jet Airways would be pulled out of F&O trading, citing the embattled carrier's failure to respond to queries about rumours in the market Jet's securities will now be moved to the trade for trade segment with effect from June 28 as a "preventive surveillance measure", from the current rolling segment, which allows daily trading, the stock exchange said in a circular.

"There are concerns with regard to continuity of flow of information about the company which is very vital for the appropriate price discovery in the scrip," NSE said, adding that trading in the stock may not reflect the actual status of the company

NSE also cited the company's failure to submit its financial results for the year ended March 31 as well as observations made by the airline's auditor as reasons for the move. On Tuesday, the stock closed 10.58% or 13.25 points lower at Rs 111.95 amid reports that London-based Hinduja Group has decided to stop talks to buy a stake in the ailing airline, while Etihad Airways of Abu Dhabi has also stalled its plan to infuse more funds into the Mumbai-based airline.

Rahul Agarwal of Wealth discovery  said, "The stock has lost 72% of its marketcap over the last one year with no clear pathway for its revival. Investors should avoid the value trap, and stay away from the stock at all cost. The company ceased operations on April 17 and with every passing day Jet is loosing whatever investment rationale it would have made for its potential saviuor. With two of its operational creditors going to NCLT to recover their dues and an unpaid bill of approximately Rs 15000 crore of its creditors, we believe that the resuscitation of the ailing airline is next to impossible and the day when the airline is officially liquidated is not very far away."

Negative sentiment has hit the stock this week on news that its two operational creditors-Shaman Wheels and Gaggar Enterprises-took it to the insolvency court National Company law Tribunal (NCLT) seeking bankruptcy proceedings against the airline. 

Jet Airways crisis: Hinduja, Etihad Group halt rescue efforts

The development came at a time when banks are looking to resolve the once premier airline's debt issues outside the insolvency process.

Jet Airways owes more than Rs 8,000 crore to a consortium of banks led by the State Bank of India, which now run the airline, while it has a much larger debt pile by way of accumulated losses to the tune of Rs 13,000 crore and vendor dues of over Rs 10,000 crore and salary dues of over  Rs 3,000 crore.

The banks have appointed SBI Capital Markets as the investment banker to find an investor to scout an investor for the company.

Bankers, after taking over the airline late March had invited bids on April 8 to sell up to 75 percent stake in the crippled carrier that formally stopped operations on April 17. Though it had received initial bids from parties- Etihad Airways, two private equity players TPG Capital and Indigo Partners, and the sovereign wealth fund NIIF, none of them chose to submit the final bids.

Edited by Aseem Thapliyal