Jet Airways Shares Jump on Buzz of Etihad Investment

Jet Airways shares jumped over 4.5 per cent on Friday, outperforming the broader markets. The buying in Jet Airways - India's second largest carrier by market share - comes amid speculation that Abu Dhabi-based Etihad Airways may increase its stake in the domestic carrier, traders said.

The Financial Express newspaper, citing sources, said Etihad Airways and Jet Airways have reached an agreement to this effect (Etihad raising stake in Jet) after talks over valuation got finalised.

Jet, which has nearly Rs 12,000 crore in debt, will use the funds to pare its debt and expand its services, the newspaper added.

Etihad Airways had bought 24 per cent stake in Jet Airways for nearly Rs 2,000 crores in April 2012. According to media reports, Etihad Airways has been looking to raise its stake to 49 per cent for some time now.

Foreign carriers can hold a maximum of 49 per cent stake in domestic airlines, according to current rules.

Earlier this month, Jet Airways posted a record net profit of Rs 467 crore for the December quarter on account of falling fuel prices and higher demand. (Read)

Jet Airways shares closed 2.7 per cent higher at Rs 557.45 as compared to 0.3 per cent gain in the broader Nifty.

In a statement to the Bombay Stock Exchange, after market hours, Jet Airways said that news of Etihad's hiking stake in the carrier "is a rumour and is speculative in nature and no such move is under contemplation."