Ajay Singh, one of the anchor investors in SpiceJet, has decided to stay invested in the country?s second largest no-frill?carrier. The Delhi-based businessman would continue as one of the directors on the company board.?
?We will not exit from the company,? Singh told FE, following the company?s lead promoter Bhupendra Kansagra and distress asset?buyer Wilbur Ross deciding to sell their stakes to Sun TV founder Kalanidhi Maran.?
Maran has agreed to buy 37.7% stake in SpiceJet. The deal is pegged at about Rs 750 crore. Maran will come out with the mandatory open offer to buy another 20% in the company on Monday. The SpiceJet stock had closed at Rs 56.05 on the BSE on Friday, 3% down over the previous close.?
Ajay Singh, along with his family members, own nearly 10% stake in SpiceJet.?
London-based Bhupendra Kansagra, Ajay Singh and former SpiceJet chairman Siddhanta Sharma are considered the main architects?of the airline. Sharma had left the company in 2008 soon after the US-based billionaire Wilbur Ross announced to invest $68 million?through subscribing foreign currency convertible bonds (FCCBs).
?Ajay Singh has taken a good decision. The trio (Sharma, Kansagra and Singh) has built the airline by putting in their blood?and sweat,? Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said. Kaul, a former Air Sahara (now JetLite) ?executive, has been tracking the Indian airline industry for over a decade now.?
Industry experts forecast that SpiceJet would make a net profit of Rs 250-300 crore in the?current financial year.?The airline reported a net profit of Rs 61 crore in the financial year ending March 31, 2010. Its other two BSE-listed?counterparts are yet to report a full-year profit after the airline industry started bleeding a few years back.?
?By the end of this year the valuations of SpiceJet would be huge upside given the growth in the sector,? an industry analyst?said adding that airline so far lacked only a stable investor.?
In the last few years, several investors have stepped into SpiceJet making the ownership in the airline very fragmented. The?airline business is very capital-incentive and requires continuous investment.?
?The significant investment by Maran will bring stability in the company,? SpiceJet director Ajay Singh said.?Some of the SpiceJet executives FE spoke to agreed with Singh?s views.?
?The development is good for the airline,? an executive said.?
The domestic aviation industry has seen exponential growth in the last few quarters on the back of revival in the global?financial sector and robust growth in Indian economy. Continuing the upward trend, domestic air traffic grew 22% in January-April period with airlines carrying 16.2 million passengers.