InvestorQ : Why has HDFC Mutual Fund bought a stake in Spice Jet when the airline industry is likely to be in deep losses?
Archita Jajjoo made post

Why has HDFC Mutual Fund bought a stake in Spice Jet when the airline industry is likely to be in deep losses?

Answer
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Rashi Mehra answered.
6 months ago


It is not HDFC MF but HDFC Trustee Company that has purchased 3.40 crore shares of SpiceJet from the open market. This translates into a 5.45% stake in the airline. Purchase of shares by HDFC Trustee could be on behalf of any of the group companies of HDFC group including the parent, the AMC or even the insurance arm. You are right that airline companies are in a spot of bother currently due to the ban on passenger flights on all domestic and international routes till 14 April. This has been done to contain the impact of the COVID-19 virus. However, this move also underlines that a large institutional investors is willing to repose faith in the airline business in general and Spice Jet in particular. More so; because India’s aviation is expected to post losses of $3 billion in June quarter