Jet Airways (India) has soared 16% to Rs 664 in early morning deals after its board approved the 24% stake sale to Abu Dhabi-based Etihad Airways for about Rs 2,058 crore.
The stock opened 20% higher at Rs 689, also hits 52-week high on the Bombay Stock Exchange (BSE). A combined around 876,512 shares have changed hands on the counter till 0919 hours on BSE and NSE.
The board of the country’s second-largest airline by passengers carried has approved the allotment of 27.3 million shares at price not less than Rs 754.74 per share to Etihad Airways on a preferential basis.
The deal, subject to regulators and shareholders approval, would be the first since India relaxed ownership rules in September and allowed foreign carriers to buy up to 49% in local carriers, which are battling stiff competition and high operating costs.
“In the short term, the deal brings much-needed cash and will help Jet improve its debt-laden balance sheet and improve its financial ratios. In the long term, too, the strategic alliance with Etihad will help Jet to improve operational efficiency and be more competitive in the domestic market as well as on international routes,” says analyst at Angel Broking.
The stock opened 20% higher at Rs 689, also hits 52-week high on the Bombay Stock Exchange (BSE). A combined around 876,512 shares have changed hands on the counter till 0919 hours on BSE and NSE.
The board of the country’s second-largest airline by passengers carried has approved the allotment of 27.3 million shares at price not less than Rs 754.74 per share to Etihad Airways on a preferential basis.
The deal, subject to regulators and shareholders approval, would be the first since India relaxed ownership rules in September and allowed foreign carriers to buy up to 49% in local carriers, which are battling stiff competition and high operating costs.
“In the short term, the deal brings much-needed cash and will help Jet improve its debt-laden balance sheet and improve its financial ratios. In the long term, too, the strategic alliance with Etihad will help Jet to improve operational efficiency and be more competitive in the domestic market as well as on international routes,” says analyst at Angel Broking.