shares of the grounded airline Jet Airways surged a whopping 146 per cent today in intra-day trading ahead of a crucial order that will decide whether the airline will go under bankruptcy or not. The unusual rise in Jet Airways’s stock prices promoted the Bombay Stock Exchange to seek a clarification from the company.
“The exchange has sought clarification from Jet Airways (India) Ltd on June 20, 2019, with reference to increase in price. The reply is awaited,” the exchange said in a brief statement.
Shares of Jet Airways opened at around Rs 30 this morning. Jet traded at around that amount for the first two hours before the share prices started gradually rising. By 3:20 pm, with minutes to go for markets to shut for the day, Jet’s stock was trading at Rs 48.30 per share.
In the next seven minutes, the prices zoomed up to Rs 74.50 per share. Jet Airways ended the day at a Rs 64 — 93 per cent higher compared to its opening of Rs 29.80.
The surge in Jet Airways’s stock prices could suggest that the markets are expecting a positive outcome at the National Company Law Tribunal, which is to decide whether the grounded airline will go under the bankruptcy process.
A consortium of lenders, led by State Bank of India, filed an insolvency plea with the NCLT after not receiving any attractive offers from anyone to take over the troubled airline.
Earlier this year, Jet Airways had to ground all operations after literally running out of money to pay for daily expenses such as aviation fuel and aircraft leasing charges. Jet’s employees have not been paid for months and its top management — including founder-CEO Naresh Goyal — have had to exit the company.
The government had asked Jet Airways’s creditors to work with potential bidders and turn the company around. However, with no attractive bids received, the lenders chose instead to seek insolvency proceedings for Jet Airways.
Prasanta Patnaik