Jet Airways Takes Wing, Up 16%

The stock price of Jet Airways ended the day at Rs 505.75 per share on Nov 23, 2012, up by 15.85% from the previous day’s closing price of Rs 436.55 per share. It had reached an intraday high (also its 52-week high) of 17.33%, touching a price of Rs 512.20 per share.

There have been reports of a Hong Kong-based brokerage and investment company buying 6.5 million shares of the airline company. This represents 37.66% of the Rs 873 crore free-float capital of Jet Airways and translates into 7.53% of its market capitalisation.

Investors have been turning bullish towards the stock lately. This sentiment has been bolstered after the Cabinet allowed foreign carriers to pick up a stake of upto 49% of paid-up capital in domestic airlines. In addition, the Finance Minister P Chidambaram recently said that the government may be open to tweaking FDI norms in the aviation sector to attract investment. The stock price of Jet Airways has seen a consistent rise over this year. Since the beginning of the year, the stock has yielded a return of 197.41%, the price per share having risen from Rs 170.05 as on Dec 31, 2011 to Rs 505.75 as on Nov 23, 2012.

With the bullish sentiment and stake buys, some movement is also expected on the promoter shareholding front soon. The SEBI recently announced that companies with promoter shareholding in excess of 75% would have to bring their stakes down and meet the mandate of a minimum public shareholding of 25%. In the case of Jet Airways, 80% of the shareholding is currently held by promoters. To ensure compliance, the company would have to bring this down before June 2013.