Sources close to Indian dollar-billionaire Rakesh Gangwal have denied reports he is in talks to acquire a stake in SpiceJet (SG, Delhi International). Gangwal is the co-founder and majority owner of IndiGo Airlines (6E, Delhi International), India's biggest airline in terms of market share and passengers carried. On the weekend, the reports were called "baseless" and "misguided."

Late last week a prominent Indian media house reported that Gangwal was in "advanced talks" to take a "sizeable" stake in SpiceJet, with other outlets picking the story up. However, on the weekend, India's Economic Times cited a banker close to the billionaire, who derided the initial reports as being misleading and potentially causing harm to investors. SpiceJet shares spiked almost 20% on October 13 on the back of the rumour.

"He (Gangwal) would like to appeal to the Securities and Exchange Board of India to investigate the root of such baseless rumours," said the banker. "It doesn’t make the remotest sense for him to invest in SpiceJet."

While Gangwal had previously indicated he would start selling down his direct and indirect stake in InterGlobe Aviation Limited, the publicly-listed entity that owns and operates IndiGo, he and his family still own over 37% of the airline. According to Bombay Stock Exchange data, the airline's promoters held almost 68% of InterGlobe's shares as of June 30, 2023. InterGlobe's latest published quarterly financials, for the three months to June 30, 2023, reported a net profit of INR30.9 billion Indian rupees (USD371 million), its highest-ever quarterly net profit, a 236% increase on the previous quarter and a sharp turnaround from the INR10.64 billion (USD127.8 million) loss reported in the comparable 2022 quarter. IndiGo Airlines CEO Pieter Elbers cited several reasons for the rebound, including weak competition.

SpiceJet Limited, the publicly listed entity operating SpiceJet, also reported a net profit of INR2.05 billion (USD24.6 million) for the three months to June 30, 2023, despite what chairman and managing director Ajay Singh said were "multiple difficulties" which include a high number of grounded aircraft resulting in fewer flights, aircraft and engine lessors attempting to have the airline declared insolvent, and a lack of cash. In August, during one of SpiceJet's now regular court appearances related to a succession of unpaid bills and broken payment promises, counsel for the airline admitted that it was "struggling to stay afloat."

According to the banker sent out to squash the investment rumours, Gangwal views SpiceJet "as a dying airline."