Stock to watch: Why SpiceJet share price will be in focus on Monday — explained
Stock to watch: SpiceJet shares witnessed a strong bull trend on Friday after the announcement of DGCA numbers for January 2024. However, the aviation stock sustained its early morning gains when the Indian aviation major informed stock market bourses about fresh developments on GoFirst involving its MD Ajay Singh.
The Indian budget carrier declared that SpiceJet MD Ajay Singh and Busy Bee Airways Private Limited had submitted a joint bid for bankrupt airline company GoFirst, which has been grounded since May 2023 and going through insolvency proceedings. As this declaration by Spicejet came just ahead of the market close, some experts are expecting a fresh reaction from the markets on Monday.
According to the Indian stock market experts, SpiceJet MD Ajay and Busy Bee Airways Private Limited have submitted a joint bid for the bankrupt airline company. They went on to add that leading online tourism company EaseMyTrip owner Prashant Pitti owns a 51 percent stake in GoFirst. So, the move is aimed at improving the operational business of SpiceJet and Busy Bee Airways Private Limited.
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If the bidding succeeds, then SpiceJet may get the benefit from EaseMyTrip that the Busy Bee Airways Private Limited is currently availing. They went on to add that Pran Sathiadasan is one of the directors at Busy Bee Airways Private Limited and he is a director at Fly Dubai as well. So, the market is expecting some perquisite benefits from Fly Dubai as well.
Triggers for SpiceJet shares
On how Ajay Singh’s move is going to impact SpiceJet shares, Sandeep Pandey, Founder of Basav Capital said, “The market is expecting that the joint move by SpiceJet MD Ajay Singh and Busy Bee Airways Private Limited is aimed at improving the operations of the aviation company in the medium to long term. As EaseMyTrip owner Prashant Pitti owns a 51 percent stake in Busy Bee Airways Private Limited, the market is sensing a perquisite business benefit for SpiceJet.”
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The former Deputy Vice President of HDFC Bank went on to add that there is one more perquisite business benefit that the market is looking at. He said that Pran Sathiadasan is one of the directors at Busy Bee Airways and he is one of the directors at Fly Dubai as well. So, some perquisite business benefit can be expected from him as well because the benefit trickling to Busy Bee Airways can be expected for SpiceJet if the joint bid succeeds.
“But, there are some challenges as well because GoFirst has an outstanding amount of around ₹6,200 crore, which is facing insolvency proceedings. If the joint bid succeeds, there will be challenge on the insolvency front as the new management will have the task to sort out this outstanding at the lowest possible level,” said Sandeep Pandey.
SpiceJet share price outlook
Speaking on SpiceJet shares, Sumeet Bagadia, Executive Director at Choice Broking said, “SpiceJet shares are currently trading in the ₹60 to ₹75 per share range. The aviation stock may become highly bullish on breaching the upper hurdle of the current range SpiceJet shareholders are advised to hold the scrip maintaining a stop loss below ₹60.” He advised fresh entry only when the SpiceJet shares breach above ₹75 hurdle decisively.
Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 17 Feb 2024, 02:10 PM IST
