Aviation counters shine on Air Deccan-UB deal

Aviation scrips today reacted sharply after announcement of UB Group's acquisition of 26% stake in the low-cost carrier Air Deccan, with volumes in all three aviation companies witnessing a more than double turnover than their two week average.

Spicejet, which is seen as another takeover target, rose 20% to Rs 61 against its Wednesday's close of Rs 50.55. The volume in the scrip trippled to 30,43,939 as compared against its two week average volume of 10,68,837. Similar volume growth was also reported in Deccan Aviation scrip.

Deccan Aviation scrip gained 11.56% to Rs 146.20, after Vijay Mallya-controlled United Breweries (Holdings) said that its will buy 26% of the company for Rs 550 crore and is looking forward to buy further 20%.

The scrip is moving northwards since last one month, as Deccan Aviation has been considering proposals to infuse additional capital by way for private equity or stake sale. It has gained 41% since last one month, where it stood at Rs 103. Deccan will issue 35 million preferential shares at Rs 155 to UB group, which significantly lower than scrip's 52 week high of Rs 162.

Jet Airways, the biggest private carrier in the country, rose 1.36% to Rs 769.53, while its volumes also doubled.