SpiceJet Shares Hit 10% Lower Circuit After Major Stake Sale

SpiceJet shares dropped 10% to hit the lower circuit on February 25. This decline followed a large sell off where nearly 8.4% of the airline’s total equity changed hands in block deals on the BSE. According to Bloomberg data, about 128.6 million shares were traded across 17 different transactions. Trading volume was over 16 times higher than the daily average of the past three months, showing intense selling activity.

By 11 am, the stock was locked at Rs 12.88 per share, its lowest price in more than 11 years. This is the seventh straight day of losses for the airline. Over the past week, the stock has lost about 25% of its value, making it the worst performer on the BSE SmallCap index today.

Technical Indicators Show Oversold Status

Market momentum indicators suggest extreme weakness for the stock. Its 14 day Relative Strength Index (RSI) has fallen to 9.01. Usually, an RSI below 30 indicates that a stock is “oversold.” While this means the selling has been very heavy, it does not always mean the price will bounce back immediately. The sharp drop today was triggered by Tuesday’s heavy trading and ongoing selling pressure.

Future Growth and Expansion Plans

Despite the market reaction, SpiceJet recently shared plans to grow its operations. Last week, the airline announced it aims to increase its fleet to about 60 aircraft. It plans to do this by leasing new planes and bringing grounded aircraft back into service.

The airline’s domestic market share grew from 1.9% in September to 4.3% in December. This growth was helped by a 56% increase in capacity during the last quarter of the year. SpiceJet has also set a goal to more than double its capacity by the winter of 2026.

Ongoing Operational Challenges

While the airline plans to expand, it still faces significant hurdles. Reports indicate that Bangladesh has barred SpiceJet from using its airspace due to unpaid dues. Because of this, some flights from Kolkata, including those to Guwahati, are now forced to take longer routes.

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