SpiceJet shares surge 7% today amid heavy trading volumes; here's why

Shares of budget carrier SpiceJet Ltd gained nearly 7 per cent in early trade on Wednesday. The stock rose 6.95 per cent to hit a day high of Rs 29.40 over its previous close of Rs 27.49. Around 31.59 lakh shares changed hands today on BSE, which was higher than the two-week average volume of 18.17 lakh shares. Turnover on the counter came at Rs 8.75 crore along with a market capitalisation (m-cap) of Rs 1,736.93 crore. There were 11,77,063 sell orders today against buy orders of 10,57,056 shares.

SpiceJet today said it has entered into a settlement agreement with Nordic Aviation Capital (NAC), a major lessor for its Q400 aircraft. "The agreement settles all past liabilities for the Q400s leased by NAC to SpiceJet. The airline presently operates five Q400 aircraft from NAC in its fleet," the airline mentioned.

"Separately, the airline will be inducting three additional Q400 aircraft from NAC back into its fleet. These three planes had been repossessed by the lessor. The induction of the three planes in addition to the fleet revival and restoration program launched by the airline would result in a substantial addition of planes in the SpiceJet fleet in the coming weeks," it further said.

Earlier in June, SpiceJet said that US-based engine services provider FTAI Aviation would provide the airline with up to 20 engines for lease. "The first few engines will be used to support the re-activation of SpiceJet's aircraft fleet over the next 2-3 months and will be critical for service on new routes," the Gurugram-based airline stated.

Last month, SpiceJet had said it begun to revive 25 of its grounded fleet using its own money and a Rs 400 crore line of credit through a government scheme (Emergency Credit Line Guarantee Scheme) it secured. The carrier had also said there were no plans to file for insolvency.

On the technical setup, the counter's 14-day relative strength index (RSI) came at 57.38. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-earnings (P/E) ratio of 0.84. It has a negative price-to-book (P/B) value of 0.28.

The scrip has a one-year beta of 0.89, indicating low volatility.

Meanwhile, Indian equity benchmarks rose in early deals today, extending their gains for the second session. The domestic indices were up led by gains in financials, banks, automobile and consumer stocks. The 30-share BSE Sensex climbed 261 points or 0.39 per cent to hit its all-time high of 63,588, while the broader NSE Nifty moved 58 points or 0.28 per cent higher to trade at 18,876, a tad below from its record peak of 18,888.

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