After the mega deal with Etihad, the promoter group of Jet Airways is likely to offload 9.8 per cent of their stake to meet the SEBI’s minimum public shareholding norms of 25 per cent.
According to Thursday’s closing price of Rs 635.20, this 9.8 per cent stake in Jet Airways will be valued at Rs 707.2 crore.
The deadline to meet the minimum public shareholding norms is June this year.
Currently, promoter shareholding in Jet Airways stands at 80 per cent. The preferential allotment to Etihad would result in an increase in the equity base of the company.
Subsequently, the shareholding of existing promoters would fall to 60.8 per cent.
This combined with its strategic partner Etihad’s stake of 24 per cent would take the promoter group holding to 84.8 per cent.
According to SEBI’s minimum public shareholding norms, the promoter group holding is capped at 75 per cent. This necessitates the offloading of 9.8 per cent stake by Jet Airways’ promoter group through either offer-for-sale (OFS) or through Institutional Placement Programme.
The Jet Airways stock soared 10.69 per cent to close at Rs 635.20 on Thursday. It touched a 52-week high of Rs 688.60 in intra-day trade with a total traded quantity of 22.60 lakh against a two week average of 4.81 lakh.
The Abu Dhabi-based carrier Etihad Airways picked up 24 per cent stake in the airline at Rs 754.74/share for Rs 2,050 crore. The acquisition price is at a 31.7 per cent premium to Jet Air’s closing share price on Tuesday. This is part of a $600-million commitment to strengthen the partnership between the two airlines. The current deal values Jet at around Rs 8,500 crore.
“The deal will have a positive impact on the stock. It might see a temporary correction after the closure of the OFS owing to the likely discount offered to shareholders under it. But eventually, the stock should bounce back owing to the twin benefit of the liquidity condition improving in Jet Airways owing to the cash inflow from the deal and well as owing to the cost-saving benefit owing to the long-term arrangement for seat sharing and international passenger traffic on certain routes,” said an equities analyst from Motilal Oswal Financial Services.