Jhunjhunwala buy lifts Spicejet; is ace investor averaging?

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Spicejet shares continued their ascent on Monday, climbing around 15 percent to Rs 20.95, with Rakesh Jhunjhunwala’s purchase of 75 lakh shares on Friday boosting sentiment for the beleaguered airline.

Falling crude prices are a positive for airline stocks in general. But investors were indifferent to Spicejet till a week back even as crude was sliding. Given the company’s battered balance sheet and the bad press about mass flight cancellations, investors might have rightly felt there were better stocks to make money on in this bull market.

Cash strapped Spicejet right now is like a plane that is being tossed around in a thunder storm. The only way it can ride out this turbulence is by raising capital. There are indications that some investors are interested.

Perhaps Jhunjhunwala’s decision to pick up a 1.4 percent stake might serve as a vote-of-confidence in the stock.

This is not the first time Jhunjhunwala has boarded Spicejet. In July 2012, Jhunjhunwala’s firm RARE Enterprises bought 25 lakh shares at an average price of Rs 30.77. This was followed by another purchase of 25 lakh shares in May 2013, this time by Jhunjhunwala’s wife Rekha, at Rs 38.94 per share. It is not clear if RARE and Rekha are still holding on their earlier purchases of 25 lakh shares each. That is because the shareholding pattern on the exchanges does not give details about investors holding less than 1 percent in the company.

Assuming they have not sold, the average price of acquisition for Jhunjhunwala, including Friday’s purchase, works out Rs 24.66 per share.

This again is assuming that earlier purchases have not been averaged through short term trading.

Punters have piled on to Spicejet, drawn by Jhunjhunwala’s track record. But whether the bet turns out to be profitable for them will depend on whether their investment horizon matches that of the ace investor.

Also read: Time to book serious profits; bull getting overconfident