If you have aviation sector shares in your portfolio, especially IndiGo (InterGlobe Aviation), then the last few days must have been no less than a nightmare for you. The crisis of the country’s biggest airline company Indigo is no longer limited to airports and troubled passengers only, but its heat is also being felt in the stock market. Cancellation of flights and operational disruptions have dealt a deep blow to investor confidence, due to which the company’s shares are continuing to sell off.
‘Crash landing’ in stock market
Last week was full of turmoil for IndiGo investors. If we look at the figures, the situation is clearly visible. In just four days, the company’s shares have fallen by more than 7%. Even on Friday, by the time the market closed, IndiGo’s shares fell 1.22% to Rs 5,371.30 on BSE.
The situation was even more critical during the day’s trading, when the stock slipped by 3.15% to touch a low of Rs 5,266. The situation was more or less the same on NSE, where the stock fell 1.27% and closed at Rs 5,367.50. Market experts say that the way the operational structure of the company has collapsed, it has alerted both big investors and retail investors.
Big blow to market cap
This continuous decline in share prices has also caused a big loss to the total valuation (market cap) of the company. If we analyze the data from December 1 till now, there has been a huge decline of about Rs 16,190.64 crore in the market cap of IndiGo. Now the total market capitalization of the company has come down to Rs 2,07,649.14 crore.
Market experts believe that the airline business runs entirely on trust and punctuality. When more than 1,000 flights are canceled in a single day, it directly impacts the brand image, and this fear is dominating the stock market at the moment. If this trend continues for a long time, the pressure on the company’s financial balance sheet may increase further in the coming days.
Will investors’ confidence return?
To reduce this nervousness of the market, the top management of the company had to come forward. Indigo CEO Peter Albers himself came forward and issued a video message and apologized to the passengers. He has assured that after ‘system reset’ the situation will become normal between 10th and 15th December.
