Explained: Why SpiceJet shares jumped 9% today

SpiceJet recently raised Rs 3,000 crore through a qualified institutional placement (QIP). The airline is also set to receive an additional Rs 736 crore from a previous funding round, which will help support its growth plans.

In Short

• SpiceJet shares surge 9% post expansion news
• Airline plans to add 10 aircraft by November end
• Two leased aircraft have already arrived in India

Shares of SpiceJet surged on Tuesday, rising by 9.45% to reach a high of Rs 63 in early trade. The surge in the stock price came after the company announced plans to expand its fleet by adding 10 aircraft by the end of November, which investors took as a positive sign of growth.

In a statement, SpiceJet confirmed it will induct seven leased aircraft, while three previously grounded planes will be brought back into service.

The company also revealed that it has already signed agreements for the seven leased aircraft, with the complete induction expected by November 15. Two of these planes have already arrived in India and will be operational soon, while the grounded planes will return to service gradually, with the first three expected to be flying again by the end of November.

This expansion comes after SpiceJet successfully raised Rs 3,000 crore through a qualified institutional placement (QIP). The airline is also set to receive an additional Rs 736 crore from a previous funding round, which will help support its growth plans.

SpiceJet has been under increased surveillance by the Directorate General of Civil Aviation (DGCA) after an audit in August revealed some deficiencies. Despite these issues, the company’s announcement about expanding its fleet seems to have boosted investor confidence.

On the technical front, analysts have provided varied insights on SpiceJet’s stock performance. The stock currently has support at Rs 64 and Rs 60, with potential to reach an upside target of Rs 74.50.

Shiju Koothupalakkal, a technical research analyst at Prabhudas Lilladher, noted that the near-term target for the stock would be around Rs 74, while support is maintained near Rs 60.

Kushal Gandhi, a technical analyst at StoxBox, highlighted increasing demand and price strength, suggesting a positive outlook. He recommended buying the stock with a target price of Rs 74.50 and maintaining a stop loss at Rs 63.50.

However, other analysts have noted some caution. AR Ramachandran, a Sebi-registered research analyst, warned that the stock has strong resistance at Rs 70. He added that if the stock closes below Rs 64, it could lead to a downward move towards Rs 53.5 in the near term.

Despite the rise, SpiceJet’s stock still trades lower than its 5-day, 10-day, 20-day, 30-day, and 50-day simple moving averages (SMAs), although it remains above the 100-day, 150-day, and 200-day SMAs. The stock’s 14-day relative strength index (RSI) stands at 47.92, suggesting it is neither overbought nor oversold.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)