In a significant development in the Indian aviation industry, Rakesh Gangwal, co-founder of IndiGo, is reportedly in advanced talks to acquire a 'sizable' stake in the domestic airline SpiceJet. This news has sent shares of SpiceJet soaring by about 16%, while IndiGo shares rose 0.9%.
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A Strategic Move
Gangwal, along with his wife Shobha Gangwal and their Chinkerpoo Family Trust, currently hold a substantial stake in IndiGo operator InterGlobe Aviation. The potential acquisition of a stake in SpiceJet could be seen as a strategic move to consolidate its position in the aviation industry. SpiceJet, which has been struggling financially, has been trying to raise funds and restore operations for about a fourth of its fleet that has been grounded. The airline's market share slid to 4.4% as of September-end from 7.3% at the end of January.
Impact on the Market
The news of Gangwal's potential investment in SpiceJet has created a buzz in the market. Shares of SpiceJet shot up by as much as 20% following the report. This development could potentially provide a much-needed boost to the troubled airline and help restore its operations.
Looking Ahead
While the exact size of the stake that Gangwal is considering buying is not known, it is expected to be significant. The talks between Gangwal and SpiceJet are said to be at an advanced stage. This development underscores the dynamic nature of the aviation industry and how strategic investments can potentially turn around the fortunes of struggling airlines. It remains to be seen how this potential deal will pan out and what impact it will have on the future of both IndiGo and SpiceJet.
