Licence in question, Kingfisher shares hit rock bottom | india | Hindustan Times
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Licence in question, Kingfisher shares hit rock bottom

india Updated: Mar 20, 2012 22:21 IST
HT Correspondent
Shares of Kingfisher Airlines

The threat of a licence cancellation of Kingfisher Airlines (KFA) sent its share price reeling downwards at the Bombay Stock Exchange (BSE), as the scrip touched its second-lowest point ever at Rs 17.7, soon after opening at Rs 19.2, in intraday trade.

It recovered slightly towards end of the day, touching a high of Rs 19.9 before ending down by 5.2% at Rs 19.1. In the past one year, the airline’s share price has eroded 52% while its market cap has fallen 45%.

On the BSE, the airline’s share price had touched an all-time low of Rs 17.6 on November 11 last year.

On the National Stock Exchange (NSE), KFA shares touched an all-time low of Rs 17.5, before ending the day with a drop of 5.7% at Rs 19.0.

“The company is facing a severe liquidity crisis and without equity infusion, it will be very difficult for the company to continue operations,” said Sharan Lillaney, aviation analyst, Angel Broking. “In fact, there are high chances that it will cease operations.”

Much of the intra-day recovery seen in the airline’s stock was due to short covering by traders, who had sold the stock in the morning trade after the news about licence cancellation threat, said Lillaney.

“This stock is best avoided by retail investors,” said Lillaney.

The airline reported a net loss of Rs 444 crore on revenue of Rs 1,342 crore for the quarter ended December 31.