Bucking the weak broader market, shares of Vijay Mallya-led Kingfisher Airlines on Wednesday soared over 18 per cent higher on the bourses, as investors rushed in to buy the stock after a heavy battering of last few days.
The robust buying activities came a day after Mr. Mallya assured the investors that the air carrier did not face any closure risks and outlined plans to arrange necessary funds and to lower its borrowing, fuel and operational costs.
Marketmen said that the stock also got a boost from the reports about Kingfisher having attracted interest from a potential strategic investor and speculations over some large industrial houses being interested in the airline.
After a firm opening this morning, Kingfisher shares gained further momentum in afternoon trade and settled 18.12 per cent higher at Rs 25.75 on the NSE.
On the BSE, the scrip settled with a gain of 14.42 per cent at Rs 25. During the day, the stock touched a high of Rs 26.05, up 19.22 per cent, at the BSE.
Earlier on November 11, the stock had slipped to its record low of Rs 17.55 amid concerns over its financial health and mounting debt worries.
Mr. Mallya yesterday said the airline had sought help from banks to raise short-term funds to the tune of Rs 700-800 crore as working capital, interest concession, and also ruled out its closure.
In a bid to shore up its financial position, the company has filed a Rs 2,000 crore rights issue with market regulator Sebi to raise capital.
It has also applied to Directorate General of Foreign Trade (DGFT) for direct import of jet fuel to reduce fuel costs drastically. Jet fuel costs are almost 50 per cent of the total operating costs of the airline.
Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of close to Rs 7,000 crore.
Other UB Group companies such as UB Holdings, United Breweries, United Spirits and Mangalore Chemicals and Fertilizers also ended in the green with gains.
Keywords: Kingfisher stocks