IndiGo shares closed up 1% on FridayRakesh Gangwal, the co-founder of Indian airline IndiGo, is in negotiations to purchase a 'sizable' stake in struggling local carrier SpiceJet, according to a report on Friday from ET Now, which cited sources.
SpiceJet's shares rose as much as 20 per cent in response to the news before closing 19.4 per cent higher.
Cash-strapped In the face of intense competition in the market, SpiceJet, which is 'struggling to stay afloat'. It has been frantically trying to raise money and restart operations for around a fourth of its fleet.
SpiceJet has also been in trouble for not being able to pay its outstanding dues and for being engaged in legal battles with its lessors.
SpiceJet's market share dropped from 7.3 per cent at the end of January 2023 to 4.4 per cent as of September's end.
Together with his wife Shobha Gangwal, Rakesh Gangwal owns 16.22 per cent of InterGlobe Aviation, the operator of IndiGo.
Gangwal's Chinkerpoo Family Trust holds a 13.5 per cent stake in Indigo, according to exchange data.
IndiGo shares closed on a 1 per cent high on 13 October.
According to reports cited by CNBC-TV18, domestic airline SpiceJet intends to increase the capacity of its fleet ahead of the busy winter season by leasing 11 aircraft.
According to the source, SpiceJet has already started the induction of 10 leased B737 aircraft, of which three leased B737s and one A340 have been returned to the fleet.
It should be mentioned, though, that due to legal disputes SpiceJet has encountered, close to half of its fleet is currently grounded. At least three of its B737 fleet are currently being repossessed because of unpaid lease obligations.