SpiceJet shares plunge 18.5% in intraday trade on reports of financial stress

NEW DELHI: Budget carrier SpiceJet’s shares plunged as much as 18.56% in intraday trade on July 30 over concerns that the airline might be in deep financial crisis.

The company’s shares fell to a low of Rs 13.60 on the Bombay Stock Exchange during the afternoon from the previous close of Rs 16.70 amid reports of the airline faltering over distributing TDS (tax deducted at source) certificates and Form 16 (needed for filing tax returns) to its employees, and an engineering audit ordered by the aviation regulator.

One of the company’s employees complained to the aviation regulator, Directorate General of Civil Aviation ( DGCA), that SpiceJet had not distributed Form 16 among its staff.

By 2:50 pm, the shares had recovered a tad on the BSE to Rs 14.10, but still down 15.57% over the previous close.

The DGCA has ordered an engineering audit of the airline following reports that the carrier was finding it difficult to provide equipments to operate flights. The audit is to be carried out in the next 15 days and will look at the quality of maintenance of aircraft and availability of spares at SpiceJet.