A Technical and circumstantial review by Ravi EQS.
Jet Airways is in big news and their flights are down from past 6 months continuously for their debit clearance issues. Unpaid vendor bills and unpaid salaries to their employees.
Jet airways is not the right choice now; their debt is the reason behind. their asset evaluation went down to -1,946.88cr. Many of their flight are down due to debits. keep on increasing numbers of flights stopped from flying. At the same time flights condition is also not to the mark.
Recently Vijay Malya, founder from kingfisher airlines announced and offered some help, but he cannot clear the debt which jet airway vow now. Total debt is around 5,295.12Cr.
Their net worth is now negative with -7,242Cr. Unpaid employees’ salary, job stability fear and attrition rate are now 70% in jet airways. However, Market capital estimated as of now is 3,116.54.
On the efforts of saving the company, the BSE board also approved the issue of 11.4 crore equity shares to the lenders upon conversion of Re 1 of the outstanding debt. Lenders will infuse up to Rs 1,500 crore via debt instruments.
The board also approved the constitution of an Interim Management Committee to manage and monitor the daily operations and cash flow of the company.
Jet airline will leverage the raise funds to clear the pending dues towards lessors, vendors, creditors and employees and planned to re-deploy several of its grounded aircraft back into it work.
On the other hand, all these activities may take decent amount of time, board decisions are pending till April 30th, 2019. Al the same phase Indian PM elections will be under pressure, government activities may speed up or slow down the trading activities, In the past I have seen nifty giving variation in huge number by shares being pulled down. This is because of fall I open interest.
Though funds are accumulated the entire Q4 profits going to be null or negative due to the drama happening now, they hardly earned in the time between Q3 to Q4 results, this will hit as a drought for sellers.
However, the buying opportunity is ahead, once the Elections are over mean time Jet airways Q4 results impacts also would have finished and the board of directors’ decisions also completed along with progress and debt clearance plans. one can see investing during June and July in Jet airways.
If the elections turned positive, then we can defiantly see some short coverings. Whatever the results may be, do not look for long term with Jet airways at the point.
Jet Airways as on 26th March 2019 quoting at 275Rs. I deal investment range seems to be 250 to 310Rs. A short-term exit level for now is 290Rs.