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Jet Airways (India) slips as OFS undersubscribed

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Capital Market
Last Updated : May 31 2013 | 11:33 AM IST

Meanwhile, the S&P BSE Sensex was down 235.57 points, or 1.17%, to 19,979.83.

On BSE, 3.46 lakh shares were traded in the counter as against an average daily volume of 14.94 lakh shares in the past one quarter.

The stock hit a high of Rs 514.45 and a low of Rs 498.60 so far during the day. The stock had hit a 52-week high of Rs 688.60 on 25 April 2013. The stock had hit a 52-week low of Rs 300.50 on 4 June 2012.

The stock had underperformed the market over the past one month till 30 May 2013, sliding 14.94% compared with the Sensex's 3.65% rise. The scrip had also underperformed the market in past one quarter, falling 2.14% as against Sensex's 7.18% rise.

The mid-cap company has an equity capital of Rs 86.33 crore. Face value per share is Rs 10.

Tail Winds, a promoter of Jet Airways (India), had put on block 43.17 lakh shares of the company, representing approximately 5% of the total paid up equity share capital, via Offer for Sale (OFS) route on Thursday, 30 May 2013, through a separate window provided by the stock exchanges for this purpose.

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The OFS got bids for 29.86 lakh shares, compared with 43.17 lakh shares on offer, as per data from the stock exchanges. The OFS was subscribed 69.16% at an indicative bid price of Rs 515.17 per share. The floor price for the offer for sale was fixed at Rs 510.

As on 31 March 2013, Tail Winds held 79.99% stake in Jet Airways (India). The OFS was aimed at complying with the minimum public float rule. Market regulator Securities & Exchange Board of India (Sebi) has mandated minimum public shareholding of 25% for private companies and 10% for state-run firms. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013.

Jet Airways (India) reported net loss of Rs 495.53 crore in Q4 March 2013, higher than net loss of Rs 298.12 crore in Q4 March 2012. Revenue declined 2.49% to Rs 3990.50 crore in Q4 March 2013 over Q4 March 2012.

Jet Airways (India) said that the performance of the company in Q4 March 2013 was impacted due to high fuel prices, rupee depreciation and increase in cost of operations. Temporary slowdown in demand has resulted into capacity reduction, the company said. This has resulted in aircraft on ground. Few of them were redeployed to profitable international routes, Jet Airways (India) said in a statement.

Shareholders of Jet Airways' recently approved Etihad's proposed Rs 2058 crore investment in Jet Airways, which would give the UAE-based carrier a 24% stake in the over two-decade old firm. Jet Airways has decided to give three director posts to Etihad Airways.

Jet Airways (India) said that the proposed Jet-Etihad deal will bring immediate revenue growth and cost synergy opportunities for both the airlines and will help strengthen Jet Airways balance sheet. The company said that the key cost benefits and synergies in fleet acquisition, maintenance, joint purchasing opportunities for fuel, spare parts, equipment and catering supplies, as well as external services such as insurance and technology support will come through. Other areas of co-operation will include joint training of pilots, cabin crew and engineers, as well as maintenance of common aircraft types and consolidation of guest loyalty programs, the company added. The alliance will bring significant guest benefits with expanded code sharing, creating a combined network of 140 destinations. All of the above will result in accelerated return to sustainable profitability, Jet Airways (India) said during Q4 March 2013 result announcement.

The Jet Airways group currently operates a fleet of 109 wide and narrow-bodied aircraft under the Jet Airways and JetKonnect brand. Jet Airways a full service airline with one of the youngest fleets in the world operates a network that includes flights to 77 destinations spanning the length and breadth of India and destinations in Europe, North America (USA & Canada) , the Middle East and Asia. The JetKonnect service is a dedicated product designed to meet the needs of the low fare segment. With a mixed fleet of Boeings and ATR aircraft, JetKonnect's convenient schedules, reliable service and low fare offer bring greater value and a seamless flying experience to its customers. Jet Airways and JetKonnect together operate over 580 flights daily.

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First Published: May 31 2013 | 10:36 AM IST

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