The share price of SpiceJet experienced a sharp decline of over 11 per cent on Monday. This decline followed the dismissal by Rakesh Gangwal, co-founder of IndiGo, of reports suggesting his interest in acquiring a stake in financially troubled SpiceJet.
The stock witnessed a substantial increase of almost 20 percent on October 13, driven by the news of Gangwal's potential interest in investing in SpiceJet. But on Monday the stock took a nosedive when sources close to Rakesh Gangwal, who denied any such interest, discredited these reports. They clarified that he had no intention of making an investment in SpiceJet, leading to a sharp decline in the stock's value.
On Monday, the stock ended its trading session in the red territory at Rs 39 price level, down by almost 4 points or nearly 8 per cent.
According to data available as of June 2023, Rakesh Gangwal owns a 13.23 per cent stake in InterGlobe Aviation, the company that operates IndiGo. His wife, Shobha Gangwal, holds a 2.99 percent stake in the same company. The Chinkerpoo Family Trust, associated with them, has a 13.5 per cent stake in the airline, as reported by the stock exchange.
Over the past six months, SpiceJet's stock has experienced a significant increase of 24.51 per cent, surpassing the Nifty 50 index. However, it's worth noting that even though the stock has rebounded during this period, it is still trading at a value lower than its highest point in the last 52 weeks, which was recorded at Rs 43.30 in December 2022.
During the last quarter, SpiceJet reported a net profit of Rs 205 crore, a turnaround from the Rs 789 crore loss in the same period last year. This positive shift was majorly attributed to the robust demand for air travel in domestic space.