Tag: SpiceJet

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Reliance Retail Completes Fundraising From 10% Stake Sale – Top Indian Market News

Reliance Retail completes fundraising of Rs 47,265 crore from 10.09% stake sale

Reliance Retail Ventures Ltd.(RRVL) said that it has raised Rs 47,265 crore by selling 10.09% stake to multiple investors. According to an official release from RRVL, the company has completed the current phase of partner induction and fundraise exercise. The investors include Silver Lakes Partners, KKR, ADIA, and others. RRVL has allotted approximately 69 crore equity shares to its latest financial partners. This is the largest fundraising exercise in the retail sector completed within 2 months. 

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SpiceJet gets clearance to fly Boeing 737 Max aircraft

SpiceJet Ltd. has received approval from the US Federal Aviation Administration (USFAA) to fly the Boeing 737 Max aircraft, after nearly 2 years of grounding. The grounding orders were placed in March 2019, after two deadly crashes. The USFAA stated that the clearance was announced after a ‘comprehensive and methodical’ 20-month review process. SpiceJet expects the jets to return to operations by the first quarter of 2021.

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RBI to conduct OMO on November 26

The Reserve Bank of India announced that it will conduct simultaneous purchase and sale of government bonds under Open Market Operations (OMO) on November 26. The central bank will conduct OMO for an aggregate amount of Rs 10,000 crore each. OMO is one of the tools used by RBI to smoothen the liquidity conditions in the economy. 

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L&T bags Rs 7,000 crore order to construct part of bullet train project

Larsen & Toubro (L&T) Construction has secured a contract worth Rs 7,000 crore from the National High-Speed Rail Corporation Ltd. The company will construct 87.56 km of the Mumbai-Ahmedabad High-Speed Rail project. L&T’s contract includes the construction of viaducts, one station, major river bridges, and maintenance depots.

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India to see Rs 10,000 crore investment in LNG stations: Dharmendra Pradhan

Oil Minister Dharmendra Pradhan said that India will see an investment of Rs 10,000 crore in the next 3 years for setting up 1,000 LNG stations. Liquefied Natural Gas (LNG) will be used for long-haul buses and trucks due to its higher energy density than CNG. It is 30-40% cheaper than diesel and will also reduce carbon emissions.

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Max Financial gets approval for share swap agreement with Mitsui Sumitomo

Max Financial Services Ltd. (MFSL) has received approval from the Department of Economic Affairs (DEA) to swap Mitsui Sumitomo’s stake in Max Life Insurance with the shares of itself. The transaction entails swapping Mitsui Sumitomo’s 20.6% stake in Max Life Insurance with a 21.9% stake in MFSL. This will result in MFSL holding more than 93% stake in the life insurance company.

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TCS expands strategic IT partnership with Kingfisher PLC

Tata Consultancy Services (TCS) has expanded its partnership with Kingfisher PLC, to accelerate the retailer’s transformation into a digital-first organization. TCS will provide consolidated application management and infrastructure support services to UK-based Kingfisher PLC. TCS has been a strategic IT partner with the retail company since 2012.

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Adani Green has no guaranteed buyer for Rs 44,540 crore solar project in India

Adani Green Energy’s $6 billion (~Rs 44,540 crore) solar power project has no guaranteed customer. This is according to the Solar Energy Corporation of India (SECI), which is the country’s main solar-adoption agency. The agreement between Adani Green and SECI in June 2020 reveals that SECI has no legal or financial obligation to support the project if it fails to find buyers. The agency has also stated that the failure of finding a customer would expose Adani Green to higher financial risk.

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Oaktree, Varde offer $2.5 billion funding to Vodafone Idea: Report

A group of private equity firms, led by US-based Oaktree Capital and Varde Partners, have offered to invest up to $2.5 billion (~Rs 18,550 crore) in Vodafone Idea Ltd. This is according to a report by BloombergQuint. Vodafone Idea (Vi) had also announced plans in September to raise Rs 25,000 crore through equity and debt instruments. Also, the company is yet to pay crores of debt to the government. 

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Apollo Hospitals partners with TataMD to launch ‘TataMD CHECK’

Apollo Hospitals has partnered with Tata Medical and Diagnostics (TataMD) to launch TataMD CHECK, a Covid-19 testing kit. TataMD will manufacture the kits at its facility in Sriperumbudur, near Chennai. Apollo Hospitals will offer the testing in the National Capital Region (NCR) from the first week of December.

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Market News Top 10 News

Cabinet Approves PLI Scheme Worth Rs 2 lakh crore for 10 Sectors – Top Indian Market News

Cabinet approves PLI scheme worth Rs 2 lakh crore for 10 sectors

The Union Cabinet has approved Production Linked Incentive (PLI) scheme worth up to Rs 2 lakh crore for 10 key sectors, for the next 5 years. The scheme will provide a boost to India’s manufacturing capabilities and improve exports. The sectors that will get the benefit of the PLI scheme include telecom, automobile, pharmaceuticals, electronic products, and speciality steel.

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Aurobindo Pharma Q2 Results: Net Profit rises 25% YoY to Rs 805 crore

Aurobindo Pharma Ltd. reported a 25% year-on-year (YoY) increase in net profit to Rs 805 crore, for the quarter ended September (Q2). The drug-maker posted a 15% YoY increase in revenue to Rs 6,377 crore, during the same period. Before the results were declared, the share price of Auro Pharma jumped 7.02% and closed at Rs 814.45 on the NSE today.

Coal India Q2 Results: Net Profit falls 16% YoY to Rs 2,948 crore

Coal India Limited reported a 16.31% year-on-year (YoY) decline in consolidated net profit to Rs 2,948.12 crore, for the quarter ended September (Q2). The company’s revenue from operations increased by 3.78% YoY to Rs 21,153.07 crore, during the same period. The Board of Directors of Coal India has approved an interim dividend of Rs 7.50 per share. 

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SpiceJet Q2 Results: Net Loss narrows to Rs 113 crore

SpiceJet Limited reported that its net loss has reduced to Rs 112.59 crore, for the quarter ended September (Q2). The company had posted a loss of Rs 462.58 crore in Q2 of the previous financial year. The airline’s total revenue from operations declined by 62.92% YoY to Rs 1,054.98 crore in Q2 FY21. SpiceJet has stated that they are focusing on further expansion of its cargo business.

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Passenger vehicle wholesale up 14% in October: SIAM

The total domestic sale of passenger vehicles in India increased by 14.19% YoY to 3,10,294 units in October. The sale of two-wheelers was up by 17% YoY to 20 lakh units, during the same month. The data has been compiled by the Society of Indian Automobile Manufacturers (SIAM).

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Godrej Industries Q2 Results: Net Profit declines 45% YoY to Rs 205 crore

Godrej Industries Ltd. reported a 44.84% year-on-year (YoY) decline in consolidated net profit to Rs 205.33 crore, for the quarter ended September (Q2). The company’s revenue from operations declined by 9.22% YoY to Rs 2,386.29 crore, during the same period. The company has posted a sharp rebound from Q1, but are yet to recover to pre-Covid levels.

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L&T Construction wins RRTS order in Uttar Pradesh

The construction arm of Larsen & Toubro (L&T) has secured significant contracts, including a Regional Rapid Transit System (RRTS) order in Uttar Pradesh. L&T would provide its services to execute the new high-speed rail project in the Delhi-Ghaziabad-Meerut Corridor. The company’s Power Transmission & Distribution segment has won a set of orders in the international market as well.

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KPIT Technologies wins strategic deal with BMW Group

The share price of KPIT Technologies jumped 8% on Wednesday after it won a strategic large deal with BMW Group. The automotive software company will provide its services to design and enhance BMW’s combined charging electronics program. The deal with BMW will be spread across 5 years.

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Indiabulls Housing Q2 Results: Net Profit falls 54% YoY to Rs 323 crore

Indiabulls Housing Finance Ltd. reported a 54% year-on-year (YoY) decline in consolidated net profit to Rs 323.20 crore, for the quarter ended September (Q2). The company’s total income declined by 25.9% YoY to Rs 2,581 crore, during the same period. The Haryana-based mortgage lender has also stated that they are back on track to disburse Rs 1,000 crore through a co-lending model in 2020-21.

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LIC Housing Finance Q2 Results: Net Profit rises 3% YoY to Rs 790 crore

LIC Housing Finance Ltd. reported a 3% year-on-year (YoY) increase in net profit to Rs 789.67 crore, for the quarter ended September (Q2). The company’s total income grew marginally to Rs 4,987.64 crore, during the same period. The company, promoted by the country’s largest insurer LIC, is mainly engaged in providing loans for the purchase or construction of residential houses.

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Editorial Editorial of the Day

Why is IndiGo Buying More Engines in Between A Pandemic?

The Story

As per the reports, IndiGo is planning to buy engines when the Covid-19 has paralysed the aviation sector globally. India’s biggest airline, IndiGo, is betting on a robust future of the industry. They are in talks with Pratt & Whitney and CFM International Inc. to buy its next batch of engines.

Pratt & Whitney and CFM International Inc. are two rival manufacturers. Reportedly, the new set of order for jet engines power around 150 new Airbus SE A320neo jets. This new deal could be worth around $10.7 billion. There is no given timeline up to which this deal can conclude.

Rumours of this big investment by an airline are surprising in these times. Last year, IndiGo placed a $20 billion (Rs 1.4 lakh crore) order for LEAP-1A engines. This was the largest ever single-engine order in history which covered 280 planes. Airline and tourism industry are the two most severely hit industries during the pandemic. Several airlines around the globe have either deferred or cancelled hundreds of plane orders due to the Coronavirus slump. To understand how badly the aviation sector has been hit by Covid-19, click here. Yet, IndiGo is rumoured to make another big investment. Is that feasible for the company?

Why now?

Any airlines investing such heavily during the pandemic does raise the question “why now?” The fears of coronavirus are still present, if not more than earlier. Governments are easing restrictions but with rising cases, another shutdown like that in Europe cannot be ruled out. IndiGo, like every other airline, has been impacted massively. Yet, India’s biggest airline wants to take this opportunity and solidify its dominance in the Indian market.

All of Indigo’s competitors are equally hurt, if not more badly. Overall market conditions also give them an opportunity to buy materials at a lower cost. Thus, IndiGo has no reason to shy away from any lucrative deal. India has one of the world’s fastest-growing aviation market. A low-cost carrier like IndiGo competes on a pricing model to attract more customers. A higher passenger load factor helps them to improve their top and bottom line. As compared to other Indian airlines, IndiGo has robust cash support. In their Q2 FY21 results, the airline reported a $2.4 billion (~Rs 18,000 crores) of cash and cash equivalents. This number was higher than $1.9 billion they reported in the same quarter previous year.

Are People Confident with Flying Again?

Indian government suspended domestic and international flight operations in the last week of March. From the last week of May, a limited number of domestic airlines were given a nod to operate. But again, with several restrictions from both the central and state governments. According to DGCA (Directorate General of Civil Aviation), air traffic plummeted by 85% year-on-year in June 2020.

Like other airlines, IndiGo has to announce a pay cut to restrict their expenses. In June, the airline asked some of its staff to take mandatory leave without pay (LWP) for 1.5 to 5 days. Next month, pilots were told to take an additional 5.5 days of LWP. They also laid off 10% of staff and cut the salaries of its senior employees. With the recent uptick in demand for air travel, Indigo has reduced the 10 days of LWP in July to 3 days in November.

The data of DGCA for September showed 39.4 lakh people taking the air route for domestic travel. It was a significant increase from 28.3 lakh people reported in August. Keeping the change in the mind, the government has also airlines to operate at 65% of their capacity. Earlier, they were restricted to operate at a mere 45% of their capacity.

Even in the pre-Covid times, IndiGo had a substantial market share in the domestic segment. The September data showed that their grip became stronger in the domestic market. They had a market share of 48.1% by the end of March 2020. Currently, they have a market share of 58.8%. At the same time, Air India, Air Asia, Vistara and SpiceJet all have faced a reduction in market share.

In these tricky times, do you think IndiGo should invest in their growth or should they be more cautious and focus on just survival?

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Market News

SpiceJet to operate flights to the US

Spicejet

Budget carrier SpiceJet on Thursday said it has been designated as the “Indian scheduled carrier,” to operate flights to the US. SpiceJet would be the first Indian budget carrier to operate services to the United States.

All international commercial air passenger services are suspended since March 22, in the wake of travel restrictions due to the coronavirus pandemic.

“This is to inform you that in terms of the Air Services Agreement between the Government of India and the Government of the United States of America, SpiceJet has been designated as Indian scheduled carrier to operate on agreed services between India and the USA. This is for dissemination to all stakeholders,” SpiceJet said in its statement to the exchanges on July 23.

SpiceJet Chairman & Managing Director Ajay Singh said the designation as an Indian scheduled carrier to operate between India and the US would help the airline in planning its international expansion in a much better and calibrated manner.

“I have always maintained that there is an opportunity in every adversity and the present crisis situation has seen SpiceJet rise to the occasion and play a pivotal role,” he said.

Shares of SpiceJet were trading at Rs 49.65, up 4.6 per cent over its previous close on the Bombay Stock Exchange.

Currently, Air India is the only Indian airline that operates on the India-US route, which has seen substantial traffic since the onset of the Vande Bharat flights.

In the case of outbound passengers on Vande Bharat flights, the sector of India-US and Canada gained the maximum passengers or nearly 60 per cent of the outbound traffic as 46,170 passengers boarded flights for the US on these 159 flights.

In conclusion, to be able to fly to the US, Spicejet will need wide-body aircraft. As SpiceJet does not have any wide-body aircraft, it will have to get such a plane on lease. This will surely deter the slowdown in the aviation sector and likely propel the growth in forwarding direction