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Jet Airways stock rises nearly 9% amid report Naresh Goyal to sell controlling stake

The stock has gained after three days of consecutive fall and rose 8.94% to 319.80 intra day compared to its previous close of 293.55. At 1:13 pm, the stock was trading 8.16% or 24 points higher at 317.10 on the BSE.

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Jet Airways' Goyal to sell controlling stake? stock rises nearly 9%

The Jet Airways stock rose the most in two weeks today amid a report that founder Naresh Goyal has agreed to sell his controlling stake in the airline and give up operational control in the airline. The stock has gained after three days of consecutive fall and rose 8.94% to 319.80 intra day compared to its previous close of 293.55.

At 1:13 pm, the stock was trading 8.16% or 24 points higher at 317.10 on the BSE. The stock closed 5.20% or 15.25 points higher to 308.80 on BSE. 

The small cap stock has lost 52.04% during the last one year and fallen 62.12% since the beginning of this year. The stock is trading above its 50 day moving average of 246.62 and below 200 day moving average of 302.26.

The stock saw a surge in its volume, falling just short of the 30-day average amount of shares - 15.5 million - in the first half of session.

About 14 million shares changed hands in the first half of session, compared with the 30-day average of 15.5 million.

Naresh Goyal owns 51 percent of the airline while 24 percent is held by Etihad Airways.

Although Goyal has been reluctant to relinquish his controlling stake in the 25-year-old airline, he is said to have met all three prospective buyers - Tata Group, Etihad Airways and a consortium of Air France - KLM and Delta Air Lines Inc, news channel CNBC TV18 reported, citing multiple sources familiar with the matter.

"Goyal has agreed to sell controlling stake in the company to an investor and has communicated the same to three strategic investors they are talking to at this point," the report quoted people in the knowledge of the matter as saying.

The report did not say whether a specific buyer was chosen.

Goyal has, however, laid out certain conditions including retaining a minority stake of below 5 percent and a board seat on the firm, the report added.

However, in response to the news channel's query on Goyal agreeing to sale of controlling stake, an airline spokesperson said, "As per policy, we cannot comment on market speculation."

On November 16, the Jet Airways stock rose over 14% ahead of a meeting of Tata Sons' board, which was likely to discuss buyout of the cash-strapped airline. The stock closed 8.07% or 25.90 points higher at 346.85 on the same day.

The carrier's financial woes have been worsened by rising crude oil prices and intense pricing competition in the domestic aviation industry.

The airline reported Rs 1,261-crore loss for the quarter ended September.

However, net loss narrowed from Rs 1,323 crore loss reported in the first quarter of the current fiscal. Higher fuel costs that soared 59 percent, and a steep rupee fall that led to a sevenfold spike in forex losses resulted in Rs 1,261 crore net loss for the airline in the second quarter.

It had posted a net profit of Rs 71 crore in the same period last fiscal. The cash-strapped airline, which was reportedly looking for investors tide over the liquidity crisis, said its fuel bill jumped 58.6 percent to Rs 2,419.76 crore during the quarter. In the year-ago period, it had spent Rs 1,525.66 crore in fuel cost.

Another crippling factor was the forex loss, which jumped more than six-times to Rs 416.69 crore from Rs 72.99 crore in the year-ago period. However, the airline reported a 9.50% rise in net sales to Rs 6,161.15 crore in Q2 compared to Rs 5,626.61 crore sales in the corresponding quarter of the previous fiscal. Net sales in Q1 of the current fiscal stood at Rs 6,010. 46 crore

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