These 2 factors dragged SpiceJet 11% lower today after surging 19% Friday

SpiceJet stock news: The stock of SpiceJet had soared 19.4 per cent last Friday, October 13, after a report had said that Gangwal was looking to buy stake in the airline

Shares of low-cost airline SpiceJet crashed 11.2 per cent to Rs 38.7 per share on the BSE in the intraday trade on Monday as investors booked profit in the scrip. At 1:25 PM, shares of the airline were quoting 9 per cent lower at Rs 39.7 as against 0.09 per cent dip in the benchmark S&P BSE Sensex.

According to reports, IndiGo co-founder Rakesh Gangwal is not looking to buy a 'sizeable' stake in the airline, as claimed earlier. As per reports, a banker close to Gangwal has refuted the latter's intentions to buy stake in SpiceJet as he still owns stake in IndiGo. It doesn't make the remotest sense for him to invest in SpiceJet," he was quoted as saying. 
 

The stock of SpiceJet had soared 19.4 per cent last Friday, October 13, after a report had said that Gangwal was looking to buy stake in the airline. The BSE has sought clarification from SpiceJet with respect to sharp price and volumes moves. The reply is awaited.

As of June, Rakesh Gangwal held 13.23 per cent stake in IndiGo, while his wife Shobha Gangwal held 2.99 per cent stake. 

The duo, however, has been paring his stake in IndiGo following a dispute with co-founder Rahul Bhatia over corporate governance issues. In August, Shobha Gangwal sold a 3 per cent stake in the company. She had sold a total of 11.52 million shares between Rs 2,441 and Rs 2,427 apiece to mop up Rs 2,802 crore, data provided by stock exchanges showed.

Meanwhile, SpiceJet's promoter group, including Ajay Singh and his family, and Spice Healthcare, owns a 56.5 per cent stake in SpiceJet.

Oil on the boil

Meanwhile, oil prices, which are a key component of an airline's cost structure, jumped more than 5 per cent last Friday as investors remained on edge about escalating geopolitical tensions in the Middle East.

Brent crude prices were back above the $90 per barrel-mark after cooling off to a low of $85/barrel last week.

The Israel-Hamas conflict has ratcheted up concerns that the fighting may affect regional energy production. The Middle East accounts for more than one third of global seaborne trade.

Besides, the International Energy Agency has described market conditions as "fraught with uncertainty" but said the Israel-Hamas war had not yet had a direct impact on physical supply. 

On October 1, The government had hiked jet fuel or aviation turbine fuel (ATF) price by 5 per cent -- the fourth straight monthly increase since July. 

ATF price was increased by Rs 5,779.84 per kilolitre, or 5.1 per cent, in the national capital to Rs 118,199.17 per kl from Rs 112,419.33, according to a price notification of state-owned fuel retailers.

The fourth straight increase in prices of jet fuel, which makes up for 40 per cent of an airline's operating cost, has taken it to the highest level since November 2022.

Reports suggest SpiceJet may introduce a fuel charge on domestic and international routes amid rising ATF prices, following the steps of IndiGo.