SpiceJet shares jump 6% as airline resolves $91 million dispute. Details here

Shares of budget carrier SpiceJet Ltd surged 5.72 per cent to hit a high of Rs 56.70 in Thursday's trade. Last checked, the stock was trading 4.70 per cent higher at Rs 56.15. Despite the mentioned rise, the scrip has declined 14.55 per cent in the past one month.

Today's upward move in the share price came after the airline announced that it has fully settled a $90.8 million (Rs 763 crore) dispute with Export Development Canada (EDC) for a total of $22.5 million, now paid in full.

"This resolution marks a significant milestone for SpiceJet, resulting in a substantial saving of $68.3 million (Rs 574 crore). The agreement represents one of the largest settlements in SpiceJet's history, strengthening the airline’s fiscal position, eliminating a significant liability from its balance sheet and paving the way for sustained growth and operational efficiency," it added.

As per the terms of the agreement, SpiceJet said it has acquired full ownership of 13 EDC‐financed Q400 aircraft. "The transfer of ownership of these 13 planes will result in a substantial reduction in operational costs, strengthening the airline's operational capabilities and fleet management. It also brings long‐term financial benefits, relieving SpiceJet from the obligation of monthly rental payments for these aircraft and further reinforcing the airline’s financial stability," it also stated.

Ajay Singh, Chairman and Managing Director of SpiceJet said, "We are very pleased to have paid the settlement amount in full and closed this agreement with EDC. This resolution allows us to move forward with a strengthened balance sheet and focus on getting our Q400 aircraft back into service as quickly as possible. We are excited to expand our regional operations and enhance connectivity across key routes, including those under the UDAN scheme, with our revitalised fleet."

On technical setup, SpiceJet's scrip traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 41.92. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the carrier's stock has a negative price-to-equity (P/E) ratio of 14.81 against a price-to-book (P/B) value of (-)2.66. Earnings per share (EPS) stood at (-)3.62 with a return on equity (RoE) of 17.95. Promoters held a 29.13 per cent stake in the private airline as on September 2024.