Shares of Jet Airways Ltd, which flew into turbulence on Monday, by losing about 11 per cent after the company had announced the exit of its CEO, slipped further during intra-day on Tuesday.

But within a short span of about six weeks, the Jet Airways stock has shed nearly 40 per cent in value.

Immediately after the deal with Etihad was announced, the Jet shares touched a 52-week high of Rs 687 on April 25 but slipped to a low of Rs 385 on Tuesday before closing at Rs 403.20 marginally lower than yesterday’s closing price of Rs 403.65 on the NSE.

However, analysts do not expect Etihad to seek to rework the share purchase price because of its plunge. Jet Airways did not respond to a query regarding this.

It was on April 24 that the board of directors of Jet approved the preferential allotment of 2.3 crore shares of Rs 10 each to Etihad Airways PJSC at a price of not less than Rs 754.73 (including premium of Rs 744.73) a share. The allotment was subsequently approved by the shareholders also at the AGM held on May 24.

Naresh Goyal, Chairman of the airline, in his speech at the AGM, said Etihad Airways PJSC had on April 24 agreed to invest in Jet Airways Rs 2,058 crore (approximately) through its share subscription. He said, this would help the company to “de-leverage and grow with renewed vigour into a more sustainable, competitive and profitable airline.”

‘Deal almost complete’

Sharan Lillaney, Research Analyst — Aviation, Angel Broking, Mumbai, said the deal with Etihad is “more or less completed” and the current share price “will not have any impact on the deal or the price at which the deal has been done.”

The sharp increase in Brent crude price and decline in rupee value would have a negative impact on the performance (of the stock) in the short term but, the “long-term fundamentals are still in place.” According to India Infoline, Jet is likely to see significant ramp-up in the international business following the deal with Eithad, which would provide it entry into hitherto untapped markets.

On whether its dollar-denominated debt would put pressure on Jet Airways because of rupee depreciation, Sharan Lillaney said Jet’s 60 per cent operational revenue was from international operations that acted as a natural hedge against rupee fluctuation. He said the fund flow from Etihad would help Jet Airways to cut its dollar-denominated debt.

With inputs from Mumbai bureau

>yegya.narayanan@thehindu.co.in