surged up to 5 per cent on the BSE on Tuesday, in an otherwise weak market, amid reports that the goverment could soon resume domestic flight operations in India. Additionally, reports suggest InterGlobe Enterprises, the parent of the country’s largest airline IndiGo, has evinced interest in Virgin Australia, Australia’s second-largest aviation company.
zoomed 5 per cent to Rs 42.95 on the BSE in the intra-day deals. A combined 3.72 million shares have changed hands on the counter on the NSE and BSE so far.
InterGlobe Aviation's stock price, meanwhile, hit a high of Rs 991.85, up 3.17 per cent on the BSE, but pared gains later to trade 1.25 per cent higher at Rs 973.4 apiece by 9:49 am. A combined 1.14 million shares have changed hands on the counter on the NSE and BSE till the time of writing of this report.
Media reports suggest the government could allow airline companies to resume operation of local passenger flights by May 18. "Permission to operate international flights will take longer, given that issues of logistics and security and safety as well as health are bigger and more sensitive there," said a report by business daily Mint.
The move to allow flights comes after the government permitted resumption of passenger train services from May 12. Both rail and flight services have been suspended in India since March 25 when the nation went into a complete lockdown.
In a separate development, the Rahul Bhatia-owned InterGlobe Enterprise has appointed an Australian consultant to look into the bidding process of Virgin Aurstralia, reports Business Standard
. “The entity has accessed data room and may take the process forward. However, no formal interest has been submitted yet,” the report said quoting a person aware of the plans. The report further added that the InterGlobe management believes Virgin Australia has strong business potential because it is the strongest rival to continental giant Qantas. READ HERE
In an exchange filing, however, InterGlobe aviation has clarified that its airline IndiGo
has neither formulated any indicative proposal, nor does it have any interest in this matter. READ FILING HERE
According to analysts at HSBC India, while demand and yields are likely to remain soft, the pace of the recovery (posting lifting of lockdown) is difficult to predict. They expect stock prices to remain highly volatile, and liquidity could overshadow profitability as the driver of stock prices. They have Hold ratings on both Indigo
(TP of INR1,015) and SpiceJet
(TP of INR44.50).
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