Jet Airways: Should You Sell Your Shares Before It's Too Late?

Overview of Jet Airways

Jet Airways, one of the top airline companies in India, has seen its market share and revenue grow steadily over the years. However, the recent financial struggles and the impending shutdown have come as a shock. Here, we will evaluate the situation and discuss whether selling your Jet Airways shares now is the right move.

Financial Struggles and Employee Issues

Naresh Goyal, the founding shareholder of Jet Airways, has stated his lack of interest in the airline. Banks are hesitant to provide substantial financial support, and the company's balance sheet is heavily laden with liabilities. Pilots and various employees have already begun leaving the company in search of stable employment.

Key financial challenges include the need to pay employee salaries and other pending bills. Without significant investment, Jet Airways may face a complete shutdown. The pending payments and liabilities make it increasingly difficult for the company to continue operations.

Share Price Analysis

The share price of Jet Airways has fallen from a high of around Rs 850 to its current levels. Despite the challenges, there is still hope that infusing some funds into the company could stabilize the situation. However, the availability of such funds is uncertain.

While some Public Sector Banks might be willing to provide limited support, it is unlikely that private sector banks will extend large loans due to the uncertain future of Jet Airways. The absence of a clear investor and the risk of government intervention could prolong the financial support process.

Potential Outcomes and Strategic Exit

The possibility of a partial shutdown is already a reality. Even before a full shutdown is announced, the short-term prospects for the airline remain unclear. In the event of a complete shutdown, the share price may see a significant drop, possibly breaking Rs 150. Conversely, any announcement of financial support could lead to a modest increase but remains unlikely to reach Rs 300–320.

Considering the uncertain financial future and the potential for a sharp decline in share price, selling Jet Airways shares at the earliest possible opportunity might be the most prudent decision. Selling while the share price is above Rs 170 could provide some liquidity and reduce your exposure to potential losses. However, it is essential to monitor the situation closely for any positive developments.

Therefore, in light of the current financial crisis, it is advisable to consider a partial exit from your holdings to avoid greater losses in the near future.