SpiceJet shares tumble over 11%. Here's why

Shares of SpiceJet tumbled over 11% to Rs 38.7 in Monday's trade on BSE after a report stated that IndiGo co-founder Rakesh Gangwal had no intentions to buy a stake in the budget Indian airline carrier.

Rakesh Gangwal has no intention of investing in SpiceJet, said a banker close to him. Gangwal was responding to media reports that said he plans to buy a stake in the low-fare carrier. “He still owns 25% in IndiGo. It doesn’t make the remotest sense for him to invest in SpiceJet,” said the banker.

Gangwal “is upset that retail investors are misguided thus, he would like to appeal to the Sebi to investigate the root of such baseless rumours,” said the banker, who didn’t want to be named.


Gangwal and his family owned close to over 37% stake in IndiGo. He decided to part ways with the airline after a bitter feud with co-founder Rahul Bhatia. Gangwal and his family have been selling stake throughout the year and aim to exit the airline in 3-4 years.

On Friday, October 13, SpiceJet shares rallied nearly 18% amid a media report that said the co-founder of airline IndiGo, Rakesh Gangwal, was in advanced stage of talks to acquire a stake in the BSE-listed firm.

At 11.02 a.m., the scrip was trading 8.9% lower at Rs 39.7. However, the stock has surged nearly 30% in the last three months, while it has plunged 48% in the past two years.

In Q1 FY24, SpiceJet reported a consolidated net profit of Rs 197.64 crore, versus a net loss of Rs 783.72 crore in the year-ago period.

The revenue from operations for the June ended quarter stood at Rs 1,917.43 crore, down 19% from Rs 2,371.53 crore reported in the year-ago period. In the March quarter of the last financial year, the revenue from operations stood at Rs 2,043.91 crore.

As per Trendlyne data, the average target price of SpiceJet is Rs 32, which shows a downside of 19% from the current market prices. The consensus recommendation from two analysts for the stock is a 'Hold'.

Technically, the stock's day RSI (14) is at 73.2. The RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. The day MACD (12, 26, 9) is at 0.8, which is above its center and signal line, this is a bullish indicator.

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