Multibagger airline stock below Rs 60: Elara India Opportunities Fund Ltd, an FII was allotted 34,66,666 equity shares upon warrant conversion!

The stock gave multibagger returns of over 150 per cent from its 52-week low of Rs 22.65 per share whereas BSE Small-Cap Index is up by 57 per cent in the same period. The

SpiceJet Ltd informed that on March 11, 2024, their Preferential Allotment Committee approved the conversion of 3,466,666 warrants issued to Elara India Opportunities Fund Limited on January 25, 2024, into the same number of equity shares. Each share has a face value of Rs. 10 and was issued at Rs. 50 per share. This means Elara India Opportunities Fund Limited has acquired 34, 66,666 shares in SpiceJet by exercising their warrant rights.

SpiceJet has achieved a major financial boost by resolving three long-standing disputes with aircraft lessors, saving the airline a collective Rs 685 crore and strengthening its overall health. The settlements with Echelon Ireland (USD 49.8 million), Cross Ocean Partners (USD 11.2 million), and Celestial Aviation (USD 29.9 million) not only reduced potential litigation costs but also brought additional benefits.

SpiceJet acquired two new airframes from Echelon Ireland and another airframe and engine from Cross Ocean Partners, bolstering its operational capabilities. These developments come alongside a recent successful fundraising of Rs 1,060 crore through a preferential issue, providing SpiceJet with much-needed capital to address past liabilities and improve its financial standing.

Today, shares of SpiceJet Ltd plunged 6.82 per cent to Rs 56.45 from its previous closing of Rs 60.58 per share with an intraday high of Rs 60.58 and an intraday low of Rs 54.60. The stock’s 52-week high is Rs 77.50 and its 52-week low is Rs 22.65. The stock gave multibagger returns of over 150 per cent from its 52-week low of Rs 22.65 per share whereas BSE Small-Cap Index is up by 57 per cent in the same period. The company has a market cap of over Rs 3,800 crore. In February 2024, FIIs bought 4,62,33,331 shares and increased their stake to 6.21 per cent compared to December 2023.

Additionally, In a bid to reshape the Indian aviation industry, SpiceJet's Ajay Singh and Busy Bee Airways’ Nishant Pitti (and also promoter of Easy Trip Planners Ltd) have partnered to acquire GoFirst, with SpiceJet leveraging its expertise to improve cost, revenue, and market share for both airlines. This strategic move coincides with SpiceJet's financial recovery, which includes capital raising, operational expansion like Haj flights, and a strengthened position following the NCLT's dismissal of an insolvency petition. Investors should keep an eye on this airline stock.

Budget 2024 for Aviation Sector, Finance Minister Nirmala Sitharaman said; “The aviation sector has been galvanized in the past ten years. The number of airports has doubled to 149. The rollout of air connectivity to tier-two and tier-three cities under the UDAN scheme has been widespread. Five hundred and seventeen new routes are carrying 1.3 crore passengers. Indian carriers have proactively placed orders for over 1,000 new aircrafts. Expansion of existing airports and development of new airports will continue expeditiously”.

Disclaimer: The article is for informational purposes only and not investment advice.