Go First's bankruptcy causes aviation stocks to climb; Indigo reaches a new 52-week high and Spicejet gains more than 4%.

Following news of Go First's bankruptcy, aviation stocks fluctuated in the morning BSE trade.
Go First's bankruptcy causes aviation stocks to climb; Indigo reaches a new 52-week high and Spicejet gains more than 4%.

On Wednesday's trading session, aviation stocks were in the black. During the session, the stock prices of Interglobe Aviation (Indigo), Spicejet, Taal Enterprises, Jet Airlines (India), and Global Vectra Helicorp increased by 2% to 6%.

At $2,235.95 per share, Indigo's stock hit a new 52-week high level. On the BSE, the stock fluctuated between an intraday low of 2,139.95 and an intraday high of 2,235.95.

In the aftermath of allegations of Go First's bankruptcy, the stocks were trading in a mixed manner during morning session on the BSE. On Wednesday, shares of Interglobe Aviation Ltd., Spicejet Ltd., and Jet Airlines (India) Ltd. increased by 1% to 6%, while Taal Enterprises Ltd. saw a more than 1% decline.

Go First, an Indian low-cost airline, submitted an application for voluntary insolvency resolution before the National Company Law Tribunal (NCLT), Delhi, on Tuesday.

Amid a financial crisis, Go First files for bankruptcy and cancels flights for two days.

Due to a severe cash shortfall, the airline temporarily suspended operations on May 3 and May 4, according to company CEO Kaushik Khona, who spoke to news agency PTI on Tuesday.

Due to GoFirst's insolvency, analysts forecast that IndiGo will earn the largest market share. A dramatic drop in crude oil prices will also help aviation stocks.

On the other hand, SpiceJet is resurrecting grounded planes to profit from Go falling off the air. The airline announced in a statement that it has begun implementing its strategy to reactivate 25 grounded aircraft. The revival would be funded by increased cash accruals and the government's Emergency Credit Line Guarantee Scheme (ECLGS). The airline has already mobilised more than 400 crore to get its grounded fleet back in the air and increase its top line.

InterGlobe Aviation stock traded at 2,200.45, up more than 6%, at 10:11 IST after opening at an intraday low of 2,139.95 per share on the BSE.

Analysts claim that the company saw a gap up opening after hearing that its competitor Go Air had filed for bankruptcy. The trend may extend towards $2,400, with $2,100 acting as support.

Spicejet's shares opened at $31.95, just above the BSE intraday low of $31.80 per share. Over 4% of the stock had increased.

In the meantime, during Wednesday's trading session, shares of Global Vectra Helicorp, Taal Enterprises, and Jet Airlines (India) increased by 1% to 5%.