Despite State Bank of India-led consortium’s assertion that it was optimistic about receiving positive response from potential investors inclined to purchase up to 75 per cent stake in the debt-ridden private carrier, the Jet Airways shares went into free-falling mode on Thursday as investors rushed to trim their holdings significantly as they felt the process of bidding may take much longer than expected by the group of lenders.
On the National Stock Exchange, Jet shares crashed 34 per cent to Rs 158.70 against previous closing of Rs 240.50. Over the last two sessions, the stock has fallen more than 40 per cent, say analysts.
Jet Airways with piled-up debts of Rs 8,000 crore or $1.2 billion has been struggling since January to sustain its normal operations. Analysts say the panic sell-off was also due to fear of Jet’s flying licence being cancelled if it stays grounded for a longer duration.
SBI, however, in a statement said it has received EoI (expression of interest) from bidders for stakes. It expects bidding process to close by 10 May. “The lenders after due deliberations decided that the best way forward for the successful revival of Jet is to get the binding bids from potential investors who have articulated their EoI and have been issued bid documents on 16 April,” said the statement.
Lenders look forward to selling 75 per cent stake in the grounded airline. SBI said it was “reasonably hopeful that bid process will be successful.”
Stocks of SpiceJet and InterGlobe Aviation (IndiGo), on the other hand, gained as they are poised to fill in for Jet’s lost business by pressing into operations more aircraft. SpiceJet has already declared induction of Boeing 737-800A to increase its ferrying capacity.
SpiceJet stocks intra-day surged 10 per cent to Rs 152.60 while InterGlobe Aviation share was up little more than 1 per cent at Rs 1,650, its peak price.
Meanwhile, the 30-share Sensitive Index of the Bombay Stock Exchange and the 50-scrip Nifty of NSE after a promising start erased early gains and slipped into red as traders booked profit at higher levels since today was the last trading day of the week.
Dalal Street was looking forward to Q4 ( JanuaryMarch) numbers of Reliance Industries Limited which were expected later in the day. The market leader, in terms of capitalisation, has declared 16 quarter-on-quarter standalone profits so far. Analysts polled by Bloomberg, however, claimed that RIL would be more dependent on its retail and telecom businesses to keep that track record going ahead.
The RIL share intra-day surged to Rs 1,388 on BSE, gaining 3.14 per cent on reports of talks with Saudi Aramco for 25 per cent stake sale by Mr Mukesh Ambani in petrochemical and refining segments.
For the last several quarters, analysts say, RIL’s profits and revenues have been increasing mostly on account of its new ventures such as Jio and Reliance Retail. Mr Ambani, the chairman, has also spoken of expanding both these businesses.
The Sensex after registering an intra-day high of 39,487.45 (+211.81) points, ended at 39,140.28 points, showing a decline of 135.36 points or 0.34 per cent. The Nifty declined 0.29 per cent or 34.35 points to finish at 11,752.80 points, falling from day’s high of 11,856.15 (+69.00) points. The Nifty Bank settled at 30,223.40 points, down 307.95 points or 1.01 per cent. In the Sensex pack, seven shares moved up and 23 were down. For the Nifty, the advance-decline ratio stood at 19 versus 31.