Shares of cash-strapped SpiceJet zoomed on Friday as investors took the cue from a report that said Rakesh Gangwal, the co-founder of IndiGo, is planning to buy a "sizeable’’ stake in the airline.

The SpiceJet scrip rallied 19.39 per cent or Rs 7.08 to close at Rs 43.60 on the BSE after hitting a 52-week high of Rs 43.82.
The buzz around the scrip was generated by an ET Now report which said the Gangwals are in advanced talks with the carrier and they could pick up a sizeable stake.

The size of the potential purchase could not be ascertained at this stage. The promoters led by Ajay Singh hold 56.53 per cent of SpiceJet.

The airline has been hit by the grounding of its fleet: it is estimated that nearly half of its fleet is off-air because of legal battles.

Aircraft lessor Celestial Aviation who is an operational creditor has initiated insolvency proceedings against the airline.

While it is claiming a default of $29.9 million for nine aircraft, other lessors such as Willis Lease Finance, Aircastle and Wilmington had moved pleas to initiate insolvency proceedings against the airline at the National Company Law Tribunal (NCLT).

Last month, the tribunal suggested that SpiceJet settle the cases with lessors.

Recently, the NCLT was informed that SpiceJet and Celestial Aviation are working toward a settlement, which is at an advanced stage. The tribunal will hear the matter on November 7.

Observers say that while it remains to be seen if the talks with the Gangwals fructify, any infusion of funds will be positive for the airline as prospects for the sector look good at least in the short to medium-term amid one player still unable to begin operations.

The Gangwals have recently offloaded part of their IndiGo stake: in August, Shobha Gangwal, wife of Rakesh Gangwal, sold nearly 2.99 per cent of InterGlobe Aviation, the IndiGo parent, for Rs 2,802 crore through open market transactions.

In February, Shobha Gangwal sold a 4 per cent stake in the company for Rs 2,944 crore. Before that, in September last year, Rakesh Gangwal and Shobha Gangwal had divested 2.74 per cent of the airline for Rs 2,005 crore.

Akasa upbeat

Akasa Air on Friday said it is now back in growth mode and will fly to several domestic and international destinations in this fiscal year after taking delivery of several additional aircraft.

The carrier which was recently affected by pilot resignations, said in a statement that in the July-August 2023 period, when a ``small set of pilots abandoned their duties and left the organisation without serving their mandatory contractual notice period’’, it was forced to cancel several flights.

"Since then, we have rationalised our network to ensure that we offer our customers the highest levels of operational reliability, as we did for the first 11 months of our operation."

Akasa reiterated that it remains financially strong and growth-oriented and that it is focused on creating a durable and reliable airline for the long run.