Jet Airways scrip boomerangs, sways 100 pc amid lows and highs

Mumbai: Jet Airways scrip boomeranged on Friday, swaying in a vast margin of over 116 per cent lows and highs after the NCLT accepted the sick airline for bankruptcy proceedings on Thursday.

A ban imposed by BSE on the futures and options contracts on Jet Airways shares lapsed on Friday.

While the deliverable quantity of shares remained low at a mere 3.42 per cent of total traded quantity on BSE, there was a severe speculative trade reported the Economic Times.

Friday’s afternoon session the stock saw over 100 per cent variation in scrip price between the two ends amid huge volumes.

“Technicality is playing its part, as the scrip is going out of Futures and Options (F&O) trade from July series, pushing traders to cover shorts. It is highly illiquid in futures trade,” said Founder of Target Investing Sameer Kalra.

Short covering played a role in the scrip’s volatile movement, said Chandan Taparia of Motilal Oswal Securities.

Jet Airways stick would be shifted to the trade-for-trade segment from June 28, the day it exits F&O basket.

Mustafa Nadeem, CEO, Epic Research, said such an upsurge in volumes and price action has been seen on the counter in the past as well. “But most of the time, such moves have turned out to be a trap. This one will also prove to be the same,” Nadeem said.

There is a lot of debt on the company’s balance sheet. There are dues to creditors, lenders, lessors and employees, and its entire fleet of planes was on rent. “We do not think there can be a big turnaround,” added Nadeem.

At 2.37 pm, the scrip was trading at Rs 70.80 on BSE which 6.7 per cent higher. Jet Airways shares swayed 116 per cent intraday from a day’s high of Rs 81.70 to a low of Rs 37.80 on NSE. The stock boomeranged some 100 per cent, on BSE.

Earlier this week, India’s civil aviation ministry distributed the carrier’s foreign flying rights among other domestic airlines following a due procedure.

Jet Airways has not announced its revenue for this fiscal. BSE has sought response from the carrier on the issue.

The company had a stormy journey of 14 years on the BSE. At Rs 1,373, Jet Airways’ shares hit its all-time closing high in April 2005, which was the second month of its listing. The scrip had made debut at Rs 1,155 against an issue price of Rs 1,100.

After that, the stock has kept falling and has never risen to that price, erasing 97 per cent of investors’ wealth since the stock was listed.