The 20% surge in Spicejet’s shares comes after the airline company on December 6 said its board will meet on December 11 to consider raising fresh capital
Shares of budget carrier Spicejet on Thursday soared 20 per cent to hit the upper circuit and skyrocketed to a 52-week high of Rs 52.29 per share. The big positive movement in Spicejet’s share price comes after the airline company on December 6 said its board will meet on December 11 to consider raising fresh capital.
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Shares of Spicejet have surged 32 per cent in the past one month, compared with the Sensex’s rise of 6 per cent.
On the BSE, Spicejet shares on Thursday opened at Rs 45 per share, which was 3.25 per cent higher than the previous close of Rs 43.58 apiece. It then started surging and after one-and-a-half hours at around 10:45 am, the Spicejet shares hit the upper circuit rising 20 per cent to Rs 52.29.
The upper circuit is the upper limit imposed by stock exchanges beyond which trade cannot take place in a particular share in a day. In the latest Spicejet shares case, investors can no longer buy the shares today unless existing shareholders start selling the shares and the prices come down.
The initial limit is usually imposed at 20 per cent. However, it can be reduced to 5 per cent by the stock exchange. Apart from the upper circuit, a lower circuit is also imposed by the exchanges when share prices fall so fast in a day.
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The upper and lower circuits are imposed to prevent unusual and sudden price hikes or falls in a particular share in a day.
On Wednesday, Spicejet in a regulatory filing said, “The board of directors of the company in its meeting scheduled on December 11, 2023 (Monday) will discuss and consider, inter-alia, options for raising fresh capital through issue of equity shares and/or convertible securities on preferential basis.”
Meanwhile, on December 4, in a relief to low-cost carrier SpiceJet, the National Company Law Tribunal (NCLT) dismissed an insolvency petition by aircraft lessor Willis Lease Finance Corporation which is claiming dues. A two-member Delhi-based NCLT bench rejected the plea moved by US-based Willis Lease Finance Corporation after SpiceJet questioned the maintainability of the petition.
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SpiceJet opposed the plea contending that Willis Lease Finance Corp has withdrawn its insolvency plea for the same dispute in March 2023 and has approached again with a new plea. During a hearing in July this year, the NCLT bench wanted to know from Willis Lease Finance Corp, as to how it filed a fresh petition again for a similar cause of action within a few months, without even sending a notice to SpiceJet as per the provisions of the Insolvency and Bankruptcy Code, 2016.
Besides Willis Lease, SpiceJet is facing insolvency pleas filed by three other aircraft lessors — Aircastle Ireland Ltd, Wilmington, and Celestial Aviation.
During a hearing in September, the NCLT suggested settling with its lessors, which have filed a plea to initiate insolvency proceedings against it. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear its dues.
