SpiceJet shares nosedive 17%, down for 6th day. Here's why

Shares of SpiceJet nosedived 17 per cent in Tuesday's trade, taking its losing run to sixth straight day. This is because investors were cautious ahead of the NCLT hearing on an insolvency plea by aircraft lessor Aircastle against the airline on May 25, which is seen as a key overhang for SpiceJet's stock. Bulk deals data released post market hours showed Nuvama Wealth Finance sold 68.40 lakh Spicejet shares at Rs 24.88 a piece during the day. This is against a two-week average volume of 28 lakh shares on the airline counter. SpiceJet saw a total traded quantity of 1.59 crore shares for the day.

Besides, investor sentiment has already been hit ever since Go First filed for insolvency proceedings.

Shares of SpiceJet plunged 17.31 per cent to hit a low of Rs 23.21 on BSE. This was the sixth straight day of fall for SpiceJet shares. The stock has fallen 22.90 per cent during the period.

SpiceJet promoters owned 58.98 per cent stake in the airline as on March 31. Out of that, 46.95 per cent of the holding was either pledged or otherwise encumbered.

Earlier this month, SpiceJet announced plans to bring 25 of its grounded planes back into service. The airline on Tuesday said it is targeting the return of four of its grounded aircraft, two Boeing 737s and two Q400s, by June 15. More planes will be back in operations in the following weeks, it said.

“SpiceJet plans to start a slew of flights including two international UDAN flights on the Agartala-Chattogram-Agartala and Imphal-Mandalay-Imphal sectors by June end. The airline also plans to launch a new UDAN flight on Kolkata-Tezpur-Kolkata sector and restart Kolkata-Gwalior-Kolkata and Jammu-Gwalior-Jammu UDAN flights. In addition, SpiceJet will launch flights on Kolkata-Agartala-Kolkata and Kolkata-Imphal-Kolkata sectors and restart flights on Kolkata-Chattogram-Kolkata sector,” the company said.

In the case of peer Go First, the Mumbai-headquartered company sent the global aviation industry into a tizzy after it applied for a ‘voluntary bankruptcy resolution’ with NCLT on May 2, claiming that technical glitches with next-generation engines supplied by Pratt & Whitney had hit normal operations leading to mounting losses.

Several lessors from across the world have already approached various Indian courts including NCLT, NCLAT and the Delhi High Court seeking a return of their aircraft assets, BT reported. Following Monday’s development, it is clear the final battle will be fought in the Supreme Court of India, with the lawyers for the affected leasing firms expected to petition an urgent hearing by a vacation bench of the apex court.

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