Monday, September 28, 2020

    HDFC Mutual Fund subsidiary buys 5.45% stake in SpiceJet

    HDFC Trustee Company, a subsidiary of HDFC Mutual Fund, has bought 3.4 crore shares of SpiceJet from open market, constituting 5.45% stake in airline. This comes days after CRISIL downgraded the rating for SpiceJet's short-term loans amid suspension of domestic and international flights due to coronavirus.


    Ajay Nirmal
    Graduated from Mumbai University, Ajay brings in the latest news across sports, tech, and world news. Ajay loves talking on tech, latest news, and events.

    HDFC Trustee Company Ltd. has bought 3.4 crore shares of SpiceJet Ltd. from the open market, thus picking up 5.45% stake in the airline, a source with direct knowledge of the matter told Mint on Monday.

    HDFC Trustee Company Limited, arm of HDFC Mutual Fund — country’s largest mutual fund — is wholly owned subsidiary of Housing Development Finance Corporation Limited.

    “This act shows that companies such as HDFC, which owns the country’s largest mutual fund, has confidence in the airline to come out of the current crisis,” the source mentioned above added.

    At 1:07pm shares of SpiceJet were down 4.5% at ₹35.35 apiece, while the benchmark Sensex dropped 989 points at 28,826.66 .

    Spokespersons of HDFC and SpiceJet were not available for immediate comment at the time of publishing this story.

    The Indian government has banned passenger flights on all domestic and international routes from 25 March to 14 April to contain the spread of the highly contagious virus in the world’s second-most populous nation.

    India’s aviation industry is expected to post losses of $3-3.6 billion in the June quarter with airlines sharing the bulk of the hit following a raft of travel restrictions and diminishing travel appetite because of the coronavirus (covid-19) pandemic, aviation consultancy Capa India said last week.

    Domestic carriers are forecast to incur losses of about $1.75 billion next quarter, followed by airports and concessionaires with losses of between $1.50 billion and $1.75 billion, according to Capa India which added that several weak airlines could exit.

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