Separated SpiceJet and SpiceXpress: With the growth of cargo business
Separated SpiceJet and SpiceXpress: With the growth of the cargo business, better service will be available, and shares rise by more than 3%
Airline SpiceJet has completed the process of carving out its cargo and logistics division, SpiceXpress, as a separate entity. This paves the way for the company to raise funds independently. SpiceJet has done this for the growth of its cargo business as well as to provide better service to its customers. The separation has become effective from 1 April. Its shares are also showing a rise of more than 3%.
The airline said the move would result in a one-time benefit of Rs 2,555.77 crore to SpiceJet and a substantial reduction in its negative net worth. Hive Off will also strengthen its balance sheet. SpiceJet operates a fleet of Boeing 737s, Q-400s and freighters. SpiceXpress and Logistics Private Limited is a subsidiary of SpiceJet Limited engaged in cargo and delivery service.
SpiceJet Chairman and Managing Director Ajay Singh said, “The separation of our cargo and logistics arm is an important step in our growth story that will unfold over time. SpiceXpress will provide a greater and differentiated focus on the cargo and logistics business.
Singh said the decision to separate SpiceXpress has been taken as part of the airline's long-term business plan. This will increase the valuation of the logistics business. “Both SpiceJet and SpiceXpress have huge potential. The way to raise capital has also been cleared to accelerate the development of the business.
Due to this news, the shares of SpiceJet are showing a rise of more than 3%. It is trading at Rs 31.30, up by Rs 1.05 or 3.47%. While talking about the last month, the stock has fallen by about 15%. The stock has fallen nearly 20% this year. Its 52-week low is Rs 29.80 and its 52-week high is Rs 62.30.