The reports of IndiGo co-founder Rakesh Gangwal looking to buy a stake in rival airline SpiceJet led to the latter’s shares surging by 20 percent at the stock market on October 13. A day later, reports citing a banker close to Gangwal said there is no such plan under consideration.
With official statements being awaited from IndiGo, SpiceJet and Gangwal, investors and market observers are left confused with the emergence of conflicting news reports.
Here’s what we know so far:
– Gangwal was said to be in talks with SpiceJet for picking up a “sizeable stake” in the financially-stressed carrier, ET Now reported on October 13, citing sources who they claimed to be privy to the development.
– The two sides were in advanced talks for the stake sale, the report added, suggesting that the negotiations were underway.
– The report boosted SpiceJet’s stock, with the shares jumping by 20 percent during the day’s trading session, and closed at ₹43.60 on the BSE. This was 19.39 percent higher than the previous day’s close.
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– Bankers close to Gangwal, however, dismissed the reports, saying that does not have the remotest interest to pick up a stake in the troubled airline, Economic Times reported.
– “It doesn’t make the remotest sense for him to invest in SpiceJet,” the report quoted the the banker as saying, without revealing the identity. “Moreover, he sees SpiceJet as a dying airline,” the newspaper further quoted the banker as saying.
– The banker, as per the report, claimed that Gangwal was upset as retail investors were “misguided by the rumours” and would like to request the Securities and Exchange Board of India (SEBI) to look into the issue.
– Gangwal, who is also the former promoter of IndiGo apart from being its co-founder, still owns 16.22 percent stake in the airline along with his wife. Gangwal’s Chinkerpoo Family Trust holds another 13.5 percent shareholding in the company.
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Updated: 14 Oct 2023, 06:34 PM IST
