Multibagger airline stock below Rs 70 in green as the company settles Rs 250 crore dispute with AerCap’s subsidiary - Celestial Aviation: details inside
The stock gave multibagger returns of over 100 per cent in just 6 months whereas BSE Small-Cap Index is up by 28 per cent.
SpiceJet Ltd and Celestial Aviation, a subsidiary of AerCap, one of the largest aircraft lessor groups, successfully resolved their long-standing dispute of USD 29.9 million (approximately Rs 250 crore) through amicable negotiations, avoiding potential litigation costs. This settlement is expected to save SpiceJet an additional Rs 235 crore. Representatives from both parties informed the National Company Law Tribunal (NCLT) last week that a settlement had been reached and requested an adjournment, which was granted by the court. The matter is now scheduled to be formally withdrawn on March 1, 2024.
SpiceJet has recently bolstered its financial position by securing an impressive Rs 1,060 crore investment through a preferential issue. Notable investors backing the airline include Aries Opportunities Fund Limited and Elara India Opportunities Fund Limited. The airline plans to utilize a portion of these funds to clear past liabilities. This strategic move received approval from SpiceJet's Board of Directors on February 21, 2024, resulting in the allocation of 4.01 crore equity shares to two investors, including Aries Opportunities Fund Limited.
Furthermore, 2.31 crore warrants were issued to four investors, including Elara India Opportunities Fund Limited, granting them the option to purchase an equivalent number of equity shares in the future. FIIs, Aries Opportunities Fund Limited was allocated 4,00,00,000 war and Elara India Opportunities Fund Limited was allocated 63,00,000 shares worth Rs 231,50,00,000.
Today, shares of SpiceJet Ltd surged 2.54 per cent to an intraday high of Rs 66.26 per share from its previous closing of Rs 64.62 per share. 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 100 per cent in just 6 months whereas BSE Small-Cap Index is up by 28 per cent. The company has a market cap of Rs 4,470 crore.
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Ajay Singh of SpiceJet and Busy Bee Airways have teamed up to bid for GoFirst, aiming to reshape the Indian aviation landscape. SpiceJet will act as the operating partner, leveraging its expertise to improve cost, revenue, and market share for both airlines. This strategic move comes as SpiceJet undergoes a financial revival, raising capital and expanding operations, including Haj flights. The NCLT's dismissal of an insolvency petition further strengthens SpiceJet's position.
SpiceJet is India’s favourite airline that has made flying affordable for more Indians than ever before. SpiceJet is an IATA-IOSA certified airline that operates a fleet of Boeing 737s, Q-400s & freighters and is the country’s largest regional player operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The majority of the airline’s fleet offers SpiceMax, the most spacious economy-class seating in India. Investors should keep an eye on this small-cap 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.
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