Lower Circuit: Why Did SpiceJet Shares Crash 10% Today?

Synopsis: SpiceJet shares hit the 10% lower circuit after nearly 15 crore shares, or 8.4% equity, changed hands in a block deal, triggering heavy selling. The stock has declined 25% over seven sessions. Despite rising passenger market share and 14% YoY revenue growth, the company reported a Q3 net loss.

The shares of this company, which is principally engaged in the business of providing air transport services for the carriage of passengers and cargo, were in free fall today after they saw an exchange of hands which included a significant proportion of the total shares.

With a market cap of Rs 1,965 crore, the shares of SpiceJet Ltd hit the 10% lower circuit in today’s trading session and reached a low of Rs 12.88. When compared to its previous day’s closing price of Rs 14.31.

About the Block deal

SpiceJet shares saw heavy selling action on February 25, with the stock touching the 10% lower circuit after close to 15 crore shares, or about 8.4% of the company’s equity, changed hands in a block deal. Large, grouped transactions like this usually suggest that a major shareholder is either entering or exiting the company. 

In the short run, this usually leads to market uncertainty as market participants attempt to make sense of the transaction and its implications for the company’s ownership structure and future plans. The stock has now fallen for the seventh straight day, with its cumulative loss over this period touching a cumulative 25% fall. 

A stock falling steadily over such a long period of time is usually a sign of sustained negativity and heavy selling pressure. The stock was locked at the 10% lower circuit price of Rs 12.88 on the BSE, which means that there are no buyers at higher levels. Lower circuit stocks are usually a sign of extreme negativity in the short term, with demand being significantly outpaced by supply.

The revenue from operations for the company stood at Rs 1,408 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 1,237 crores, up by about 14 per cent YoY. However, the net loss stood at Rs 262 crore in Q3 FY26, down compared to the Rs 20 crore profit in Q3 FY25.

Passenger market share increased from around 2% in Q2 FY26 to 4.3% by December, indicating a noticeable improvement over the quarter. The sequential rise from 2.6% in October to 3.7% in November and 4.3% in December suggests that network expansion and capacity additions contributed to the gains. 

The near doubling of market share within three months points to higher passenger carriage and improved capacity deployment. However, the sustainability of this growth will depend on competitive dynamics, demand conditions, and the airline’s ability to maintain operational consistency.

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