SpiceJet is certainly a hold: Rajesh Jain, Market Strategist

Rajesh Jain, Market Strategist, in a chat with ET Now talks about SpiceJet deal and its impact on the stock.

What do you make of the SpiceJet deal? Yes, it is a low cost airline. It has turned profitable. It is a good business that is what a lot of people say but do you think it is a good buy for Mr Maran?

I have been surprised at the suitor and for SpiceJet it will be interesting to see how Mr Maran’s arrival on the promoters list will change the operating style. SpiceJet has been a predominantly out of north India kind of airline and now you have a major investor who has his roots down south. So culturally as well in terms of the route maps that SpiceJet follows, one will have to see whether it is going to have an impact. But having said that, this is just a change in promoters and not in the management.

One of the key old promoters also continues to be with the company and I should also expect the company not to change too much. So one has always liked SpiceJet for its operating metrics, the business model and the product that it offers. It is easily one of the most popular and the best low cost products in the aviation industry today.

Globally, aviation is looking up and at the price at which Mr Maran has acquired it, there is enough from the table for him and it should not put undue pressure on the company to try and match up returns to match the price that he has paid for this stock. So it is a very good point at which the deal has taken place. So there should not be any excessive pressure from a new promoter on the operating style of the company.

I would continue to be positive on the company. There could be cultural issues but I suspect they will sort themselves out and going forward, SpiceJet should continue to ride the upswing in the aviation sector. Certainly a hold if not an immediate buy.