InvestorQ : Is it likely that Hinduja group will now take over Jet Airways? Can I buy the stock now?
Dia Deshpande made post

Is it likely that Hinduja group will now take over Jet Airways? Can I buy the stock now?

Answer
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Ria Jain answered.
1 year ago


As of now there appear to be two challenges for the Hinduja group taking over Jet Airways. Firstly, Hindujas are asking for a haircut of 80% on the loans outstanding in the books of Jet Airways. That means; banks will have to write off nearly Rs.8000 crore out of the Rs.10,000 crore that is outstanding in the books of Jet. Banks, led by SBI, may not too keen on this arrangement as it is a big loss they will have to take and it may set a wrong precedent for future such deals and negotiations.

Secondly, Hinduja is only asking for a minority stake in Jet Airways and that means they are only negotiating directly with Etihad for their 24% stake. That will really not make any substantive difference to the fortunes of Jet Airways. You will have to really wait and see how this case pans out in the coming days, but you should be very cautious about buying the stock at this point because the risks outweigh the returns.


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K V RAO answered.
1 year ago


Don't be carried away by the take over prospects. Look at the basic business model. Airlines business provides a thin bottom line. Why fritter away resources? You have other opportunities in the market. With more than 5500 listed companies, even 5% of the list gives ample opportunities.