Jet Airways jumps 93% as revival hopes spark speculation

Ahead of the National Company Law Tribunal (NCLT) order on the insolvency proceedings, the Jet Airways stock witnessed a sharp rebound on Thursday, zooming as much as 150% on the National Stock Exchange (NSE).

The stock opened at Rs 30.20 on BSE and fell another 18.42% to touch a record low of Rs 27. From there, it staged a major recovery process and the stock witnessed a massive rally to touch an intra-day high of Rs 77.35 on BSE, before closing at Rs 64 apiece, up 93.35% from its previous close.

On NSE, it opened at Rs 29.95 a share and touched a record low of Rs 26.55 before rebounding to touch an intra-day high of Rs 82.75.

According to an analyst, apart from the NCLT order, short covering by traders played a role behind the sharp upsurge. The stock will not be available in the F&O trading from June 28, the BSE and NSE recently said in a joint statement.

"Market is expecting some relief in the NCLT order. Hence, short covering helped to push the stock higher on Thursday, though no rational investor would indulge in such short coverings, especially of a company that may never fly again," the analyst said.

Another analyst said traders are aggressively shorting this stock as it is continuously going down and got nothing to do with NCLT order.

"It is a technical call, and almost all stocks on Thursday went up. On a low base, of course, the jump looks quite a bit. There are speculations in the market but I doubt if anyone would like to burn his finger by investing in Jet," the analyst said.

A K Prabhakar, head of research, IDBI Capital, said, "Any investor who is stuck in the Jet stock should use this rally as an opportunity to exit. It is not going to be an easy turnaround story from where it is now."

On Thursday evening, the NCLT admitted the State Bank of India-led lenders' insolvency application against the private carrier, according to media reports. The tribunal has declared a moratorium on the recovery of dues from Jet Airways. The next hearing on the case is scheduled in July.

The interim resolution professional (IRP) has been asked to close the insolvency process of Jet Airways within three months.

The stock continued its downward move for the fourteenth straight session on Wednesday after lenders took the ailing carrier to the bankruptcy court to recover their dues worth Rs 8,500 crore, instead of an outright sale to the lone bidder. The total outstanding loan of the private airline is over Rs 20,000 crore. Jet shares have fallen almost 77% since May 31.

Once the largest private sector airline company in the country, the company stopped flying on April 17 after it ran out of cash. The unpaid lessors took away most of its operational aircraft. On May 30, the cash-strapped Jet Airways had said that it is not in a position to consider and approve the audited financial results for the fourth quarter of 2018-19.