Share prices of Indian carriers plummet 100%

Mumbai: Share prices of Indian carriers in the Bombay Stock Exchange (BSE) have plummeted nearly 100% on weak investor sentiments in revenue growth rate. Whereas Jet Airways' share price has dipped from Rs 1,049.85 in December 2007 to Rs 135.65 on December 5, 2008, Kingfisher's stock price has slipped from Rs 335 a year ago to Rs 27 on Friday.
The aviation sector being cyclical, revenue growth is sensitive to over-heated global financial markets, say market observers. In addition, there is heavy fund sell-off on weak sentiments. Experts say that the picture is still hazy as to when aviation stocks will perform well.
India's largest private carrier Jet Airways' share price has dipped from Rs 1,049.85 to Rs 135.65 on the BSE. It reached an all-time low at Rs 119.25 on December 2, 2008. It may be noted that in 2005, when Jet came out with an initial public offering (IPO), the price band was fixed at Rs 950-1,125, considering that it was the most favoured airline amongst the business class, with a 46% market share at that time.
Kingfisher's stock price too has declined from Rs 335 to Rs 27. Delhi-based low cost carrier SpiceJet, in which US-based private equity player Wilbur Ross injected $80 million recently, is also underperforming. Its stock price slumped to Rs 11.99 on Friday, as compared to Rs 104.80 a year ago.
06/12/08 Shaheen Mansuri/Financial Express

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Categories: Indian Aviation- In General Dec 2008