New Delhi: – Budget carrier SpiceJet’s Board will meet on Monday (December 11), to decide on the proposal to raise fresh capital in the Company through the issue of equity shares. Sources said the Company was looking for anywhere between $100-1200 million fresh equity infusion.
The airline’s stock jumped 20% on the Bombay Stock Exchange, hitting the upper circuit, on Thursday after the news broke.
Experts are extremely bullish on the stock, which is significantly undervalued.
“SpiceJet, with its market capitalization currently standing at around INR 4000 crore, appears to be significantly undervalued when compared to its peers in the Indian aviation industry. A substantial equity infusion into the airline can turn around the fortunes of the 18-year-old airline,” said an industry expert.
For reference, the market capitalization of IndiGo is INR 1.1 lakh crore. “This stark difference in market capitalization positions SpiceJet as an attractive investment opportunity, offering substantial growth potential and attractive returns for investors,” he said.
The airline has multiple strong points to its advantage. “SpiceJet holds coveted slots and routes at all important Indian and international airports like Dubai, Thailand, Oman, Colombo, Male etc., providing a competitive edge in the market and contributing to its potential for sustained growth. It also has a 200-plus plane order with Boeing for the its 737 Max aircraft.”
“A correction in SpiceJet’s stock prices is imminent and could result in sizeable returns for investors. We believe it stands out as the best bet among Indian aviation companies for growth and returns. SpiceJet’s current share prices present an advantageous entry point for investors looking to capitalize on potential upward movements,” a senior SpiceJet official said.