SpiceJet Shareholders Keen For a Bailout Which Protects Their Interest

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SpiceJet shareholders have had an excellent run for the last four trading sessions. SpiceJet Ltd has witnessed a share growth of 21%, and at the same time, India’s biggest airline, IndiGo, has seen a fall of 4%. For now, it looks like the investors of the company believe that a bailout is for the aviation industry, which is going to protect their interests in the company. Interestingly, IndiGo reported Rs 9,400 cash at the end of December, so the airline can comfortably meet its fixed costs even if the commercial operations were stopped for six months. But SpiceJet doesn’t have any cash to speak of and is facing a lot of problems.

Picture Credits - QZ

Will The Government Rescue SpiceJet Shareholders? 

As per the reports from an anonymous tracker assessing the current conditions of the market, the government is likely to step in and offer a bailout to the aviation industry in the form of guaranteeing credit returns to the money lenders. SpiceJet shareholders will be able to benefit if such help comes their way. Governments of some other countries though have been asking for equity stakes in the company against offering help.

SpiceJet Shareholders Witnessing Growth in Stocks

The stocks of SpiceJet Shareholders have been rising amidst the time of no operations. This is in expectations of reviving help from the government. They are not worried about losing the equity stake in the company against receiving support. But the SpiceJet shareholders should not forget that the government can ask for an equity stake in the company as it did with Yes Bank Ltd earlier this year. The airline is going to need help in some form when the normal operations resume. The expected passenger count for the year has also dropped from 140 million to around 80-90 million. These numbers pose a threa12t for most of the airlines banking to regulate massive cash flows once the lockdown is removed.

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Tanay hails from Bilaspur, Chattisgarh and is a sports and fitness enthusiast. Reading and writing is something which comes to him out of love for the web of magic that words can create.

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