Investors who placed bets on aviation company SpiceJet were handsomely rewarded on Wednesday, with the share price rising 18% intraday on report that its chairman and managing director Ajay Singh is mulling a partial stake sale in the budget airline. Riding high on promoters’ stake sale buzz, the stock has surged nearly 42% in the last four sessions, from ₹36.95 on July 28 to ₹52.35 in intraday today. As per the latest shareholding pattern available on the BSE, Ajay Singh and his family own 59.40% shares in Gurgaon-based airline.

On Wednesday, SpiceJet share price opened flat at ₹44.4 and rallied as much as 18.02% to touch an intraday high of ₹52.35 on the BSE. Paring some of the early gains, the aviation stock closed 12.73% higher at ₹50.05 mark, driven by volume trade. As many as 54.50 lakh shares changed hands over the counter on the BSE, ten times more than the two-week average volume of 5.1 lakh stocks. The market capitalisation of the smallcap stock surged to ₹3,012 crore.

The stock price also got a boost after the country’s second-largest airline, in terms of domestic passengers carried, said it cleared all outstanding principal dues of the airport operator Airport Authority of India (AAI). The company in an exchange filing on August 2 said it would no longer remain on ‘cash and carry’ at AAI run airports across the country and revert to advance payment mechanism for daily flight operations.

In another big boost for the airline, AAI will release SpiceJet’s ₹50 crore bank guarantee following the airline clearing all its principal dues. This will result in additional liquidity for the airline.

SpiceJet’s shares have remained under pressure in the calendar year, with the stock price falling 27% on a year-to-date (YTD) basis. It has plunged more than 32% in the last one year and nearly 17% over the six-month period. The stock hit a 52-week low of ₹34.60 on July 28, 2022, after aviation regulator Directorate General of Civil Aviation (DGCA) asked the airline to curtail its services by half for eight weeks, citing safety issues. The regulator issued the directive after several of its planes, along with other domestic carriers like Air India, Go First, IndiGo, and Air India Express, reported many incidents of technical snags on flights off-late.

However, SpiceJet in a statement said all its flight operations remained absolutely normal and there would be no flight cancellations because of the regulator's order as it is already operating limited services "due to the current lean travel season".

The airline received a lot of attention due to repeated malfunctions reported in recent days. Among the incidents that were reported, a SpiceJet Boeing 737 aircraft carrying passengers from Delhi to Dubai had to be landed in Karachi, Pakistan, after developing a technical malfunction in July. SpiceJet's Delhi-Jabalpur flight had to be returned as crew members observed smoke in the cabin mid-air due to oil leakage in one of its engines. On June 20, a SpiceJet Boeing 737-800, with about 200 people on board, had to be returned to Patna after take-off as sparks were observed in one of its engines.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.