SpiceJet shares snap 3-day fall, jump 9% today. Here is why

Shares of budget carrier SpiceJet Ltd picked up strong momentum in Thursday's trade, pausing their three-day losing run. The stock surged 8.92 per cent to hit a day high of Rs 61.30. It was last seen trading 6.98 per cent up at Rs 60.21. At this price, the scrip has risen 12.44 per cent in the last six months.

Today's sharp rise in the share price came after the airline settled a $16 million dispute. "SpiceJet has reached an amicable settlement with Genesis, resolving their over $16 million dispute. Under the agreement, SpiceJet will pay Genesis $6 million and Genesis will acquire $4 million in SpiceJet equity at a price of Rs 100 per share. The agreement will also result in a significant saving for the airline as it navigates a robust path toward long-term growth," it stated in a BSE filing.

"The settlement with Genesis underscores SpiceJet’s continued commitment to restoring financial stability, achieving operational resilience, and reducing legal liabilities. Subject to the settlement terms being satisfied, both parties have agreed to withdraw all ongoing litigations and disputes related to this matter at the appropriate forums," it added.

Ajay Singh, Chairman and Managing Director at SpiceJet, said, "This settlement marks another crucial step in our journey towards financial stability. We are pleased to have resolved this matter amicably with Genesis through constructive negotiations. This agreement, which includes Genesis acquiring an equity stake in SpiceJet, will significantly reduce our financial liabilities and further strengthen our balance sheet."

This settlement follows resolutions with other lessors, including Horizon Aviation, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP, Shannon Engine Support Limited, Export Development Canada, among others.

In September 2024, Carlyle Aviation agreed to convert $30 million of lease arrears into SpiceJet equity at INR 100 per share, signalling increasing confidence from stakeholders in the airline’s financial and operational recovery.

Technically, the scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 150-day and 200-day simple moving averages (SMAs) but lower than the 100-day SMA. The stock's 14-day relative strength index (RSI) came at 53.16. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a negative price-to-equity (P/E) ratio of 15.54 against a price-to-book (P/B) value of (-)2.79. 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 SpiceJet during the September 2024 quarter.

The scrip saw high trading volume today as around 1.45 crore shares changed hands at the time of writing this story. The figure was higher than the two-week average volume of 60.57 lakh shares. Turnover on the counter came at Rs 86.02 crore, commanding a market capitalisation (m-cap) of Rs 7,773.42 crore.