Multibagger penny stock below Rs 70 and FIIs & DIIs increase stake: Airline stock in green after NCLT rejects Wilmington Trust's insolvency petition claim – know more here!

The stock gave multibagger returns of over 110 per cent in just 6 months whereas BSE Small-Cap Index is up by 29 per cent.

SpiceJet, the Indian low-cost carrier, has received a much-needed boost as the National Company Law Tribunal (NCLT) dismissed an insolvency petition filed against it by aircraft lessor Wilmington Trust SP Services. This follows a similar ruling in December against another lessor, Willis Lease Finance Corporation.

The petition from Wilmington stemmed from unpaid dues, but SpiceJet successfully challenged its maintainability. The airline argued that Wilmington was not an actual operational creditor but acting as a trustee for another lessor, Aircastle (Ireland) Ltd. This technical argument proved decisive for the NCLT, which ultimately dismissed the petition.

However, SpiceJet's financial woes are far from over. The airline continues to face legal disputes with other aircraft lessors, including Aircastle, Celestial Aviation, and Alterna Aircraft. Moreover, the Delhi High Court has ordered SpiceJet to pay USD 4 million to two engine lessors by February 15, failing which could lead to the grounding of those engines.

Despite these challenges, SpiceJet offers some positive signs. The airline recently managed to raise its bank balance to over Rs 900 crore, partially due to government support through the Emergency Credit Line Guarantee Scheme. This financial injection could provide some breathing room as the airline navigates its ongoing legal and financial battles.

While the NCLT dismissal provides a temporary respite, SpiceJet's long-term survival hinges on its ability to resolve its debt issues and secure sustainable financial footing. The airline's performance in the coming months will be closely watched by investors, creditors, and the Indian aviation industry as a whole.

Earlier, SpiceJet raised Rs 744 crore in the first tranche of a Rs 2,240 crore preferential capital infusion, allocating shares and warrants to investors like Elara India and Carlyle Aviation. The company seeks an extension to complete the remaining allotment due to limited banking days and anticipates this funding to bolster its expansion, enhance its finances, and solidify its position as a reliable carrier.

SpiceJet Ltd is principally engaged in the business of providing air transport services for the carriage of passengers and cargo. The company is the 2nd largest player in the domestic aviation industry with a market share of 13 per cent. The company has a market cap of over Rs 4,500 crore. In December 2023, FIIs increased their stake to 0.33 per cent and DIIs have increased their stake to 0.04 per cent from 0.29 per cent and 0.01 per cent respectively.

Today, shares of SpiceJet Ltd gained 4.68 per cent to an intraday high of Rs 67.30 per share from its previous closing of Rs 64.29. The stock gave multibagger returns of over 110 per cent in just 6 months whereas BSE Small-Cap Index is up by 29 per cent. Investors should keep an eye on this small-cap stock.

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