Kingfisher Airlines was the star performer in the aviation sector, as the stock shot up 20 per cent — the maximum permissible limit — at Rs 12.97. Kalanithi Maran-controlled SpiceJet rose 12 per cent at Rs 38.60. However, Jet Airways, which started on a promising note to touch a high of Rs 398.6, failed to sustain the gains and closed at Rs 360.50, a fall of Rs 7.85 over the previous day's close.
The Government last week allowed 49 per cent investment by foreign airlines in aviation.
“We believe it is too early to assume that foreign airlines will pay a significant premium to invest, given fundamental headwinds,” said JP Morgan in a research report.
“Amongst the listed players, Jet Airways does not meet eligibility norms given its current promoter’s holding of 80 per cent,” JP Morgan report said, and added, “SpiceJet is the most likely domestic player which could see a potential investment — it has a relatively stronger balance sheet compared to its listed peers and has potential to gain market share through fleet expansion.”
According to analysts, debt-ridden Kingfisher Airlines may struggle to attract FDI in the near term.
“This is on account of its large outstanding debt ($1.8 billion) and vendor payments, small market share, large proportion of impaired fleet. Additionally, according to reports, a large part of its fleet has already been repossessed by the lessors,” Bank of America Merrill Lynch said in a report.
badrinarayanan.ks@thehindu.co.in
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.