Conflicting Reports Surround Rakesh Gangwal’s Alleged Interest in SpiceJet
Reports of IndiGo co-founder Rakesh Gangwal’s potential stake acquisition in rival airline SpiceJet caused a significant surge in SpiceJet’s shares by 20 percent on the stock market on October 13. However, just a day later, a banker closely associated with Gangwal denied any such plan. This has left investors and market observers in a state of confusion due to the contradictory news reports.
Here’s the information we have gathered so far:
- Initial Reports: On October 13, ET Now reported that Rakesh Gangwal was in talks with SpiceJet regarding the acquisition of a “sizeable stake” in the financially troubled airline, citing insider sources who were privy to the matter.
- Advanced Negotiations: The report indicated that the negotiations between the two parties were in an advanced stage, suggesting that discussions were actively taking place.
- Stock Surge: The news led to a substantial increase in SpiceJet’s stock, with shares rising by 20 percent during the trading session, closing at ₹43.60 on the BSE, which was a 19.39 percent increase from the previous day’s closing.
- Denial by Bankers: Contradicting the initial reports, bankers close to Rakesh Gangwal dismissed the idea, asserting that he had no intention of investing in the troubled airline. According to the Economic Times, the banker stated, “It doesn’t make the remotest sense for him to invest in SpiceJet.” Furthermore, the banker characterized SpiceJet as a “dying airline.”
- SEBI Involvement: The banker expressed Gangwal’s frustration at retail investors being “misguided by the rumors” and suggested that the Securities and Exchange Board of India (SEBI) investigate the issue.
- Gangwal’s Current Holdings: Rakesh Gangwal, who is not only the co-founder but also the former promoter of IndiGo, still owns a 16.22 percent stake in the airline, along with his wife. Additionally, his Chinkerpoo Family Trust holds another 13.5 percent share in the company.
In a subsequent statement, the banker clarified that Gangwal maintains a 25 percent stake in IndiGo and has no interest in further investments in SpiceJet. This reaffirmed the belief that Gangwal sees SpiceJet as a struggling airline. SpiceJet’s shares experienced an 18 percent surge in response to the initial reports, but the contradictory statements have left the situation uncertain. Gangwal, upset by the misinformation affecting retail investors, has appealed to SEBI to investigate the origins of these unfounded rumors. SpiceJet has faced financial challenges and was placed under “enhanced surveillance” by the aviation regulator, adding complexity to the situation.
Frequently Asked Questions (FAQs) About Rakesh Gangwal and SpiceJet Stake Acquisition Rumors
1. What are the recent reports about Rakesh Gangwal and SpiceJet?
- Recent reports suggested that Rakesh Gangwal, co-founder of IndiGo, was in talks to acquire a significant stake in rival airline SpiceJet, causing a surge in SpiceJet’s stock. However, subsequent reports denied these claims.
2. Did Rakesh Gangwal confirm his intention to acquire a stake in SpiceJet?
- No, Rakesh Gangwal did not confirm his intention to acquire a stake in SpiceJet. In fact, a banker closely associated with him denied any such plans, stating that it made no sense for Gangwal to invest in SpiceJet.
3. How did the initial reports affect SpiceJet’s stock?
- The initial reports of Gangwal’s potential stake acquisition led to a 20 percent surge in SpiceJet’s stock during the trading session.
4. Why did bankers close to Rakesh Gangwal dismiss the reports?
- Bankers close to Gangwal dismissed the reports, claiming that he had no interest in investing in SpiceJet and considered the airline to be struggling.
5. What action did Gangwal take regarding the rumors?
- Rakesh Gangwal, upset about the misinformation affecting retail investors, appealed to the Securities and Exchange Board of India (SEBI) to investigate the origin of these baseless rumors.
6. What is Rakesh Gangwal’s current stake in IndiGo?
- Rakesh Gangwal still holds a 25 percent stake in IndiGo, the airline he co-founded. This reaffirms that he has no immediate plans to invest in SpiceJet.
7. How has SpiceJet been performing financially recently?
- SpiceJet has faced financial challenges, and it was placed under “enhanced surveillance” by the aviation regulator. In September, the airline completed a significant payment to a former promoter, indicating some financial pressures.
8. Is there any official statement from SpiceJet or IndiGo regarding this matter?
- As of now, there has been no official statement from SpiceJet, IndiGo, or Rakesh Gangwal regarding the rumors. The situation remains uncertain, and investors and market observers are eagerly awaiting official clarifications.