Aviation stocks rise on Go First bankruptcy; Indigo touches new 52-week high, Spicejet up over 4%

Aviation stocks traded in the green zone on Wednesday's trading session. Shares of Interglobe Aviation (Indigo), Spicejet, Taal Enterprises, Jet Airways (India) and Global Vectra Helicorp had gained 2% to 6% during the session. 

Shares of Indigo recorded a new 52-week high level at ₹2,235.95 per share. The stock touched an intraday low of ₹2,139.95 per share and intraday high of ₹2,235.95 on BSE. 

The stocks were trading mixed in morning trade on BSE in the wake of reports of Go First bankruptcy. Shares of Interglobe Aviation Ltd, Spicejet Ltd, Jet Airways (India) Ltd rose 1% to 6% on Wednesday, while Taal Enterprises Ltd lost over 1%. 

On Tuesday, Indian low-cost carrier, Go First filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal (NCLT), Delhi. 

Go First files for bankruptcy proceedings, suspends flights for 2 days amidst financial crunch

The airline has temporarily halted operations on May 3 and May 4, due to a serious cash shortage, CEO Kaushik Khona of the company informed news agency PTI on Tuesday. 

Analysts predict that IndiGo will gain the biggest market share as a result of GoFirst's bankruptcy. Additionally, a sharp decline in crude oil will benefit aviation stocks. 

SpiceJet, on the other hand, is reviving grounded aircraft in order to take advantage from Go going off air. In a statement, the airline said that it has activated its plan to bring 25 grounded aircraft back. Better cash accruals and the government's Emergency Credit Line Guarantee Scheme (ECLGS) will provide funding for the revival. To get its grounded fleet back in the air and boost its top line, the airline has already mobilised over ₹400 crore.

Shares of InterGlobe Aviation opened at intraday low of ₹2,139.95 per share on BSE but managed to pick up momentum and at 10:11 IST, the stock was trading ₹2,200.45, up over 6%. 

According to analysts, the stock has seen a gap up opening post the news of its peer Go Air declaring bankruptcy, the momentum may continue towards ₹2,400 whereas ₹2,100 is support.

Shares of Spicejet opened at ₹31.95, slightly above the intraday low level of ₹31.80 per share on BSE. The stock had gained over 4%. 

Meanwhile, shares of Global Vectra Helicorp, Taal Enterprises, Jet Airways (India) gained 1% to 5% on Wednesday's session.