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Informist, Monday, Dec. 8, 2025

 

By Simran Rede

 

MUMBAI – Aggressive short bets were added to the derivatives chain of InterGlobe Aviation following widespread IndiGo flight cancellations across the country primarily due to a shortage of pilots. This followed lapses in implementing the government's regulations on pilot rest and duty hours announced a year ago, leading to a major fall in the stock price of the company for seven sessions now. 

 

Shares of the aviation company closed over 8% lower at INR 4,923.50 on the National Stock Exchange on Monday, losing almost INR 173 billion in market capitalisation. The stock was the worst hit on the Nifty 50 and has fallen almost 17% in seven trading sessions.

 

Premiums on out-of-the money INR 5,000-INR 6,000 call strikes, which are 2-22% higher than the spot level, fell around 39-61%. Those on put options INR 4,800-INR 4,500, which are 3-9% lower than the current market, rose manifold. The highest addition of open interest was at INR 5,500 call and INR 4,500 put contract. 

 

More short positions were added to the futures series of InterGlobe Aviation. The December contract's open interest rose 44% and the series closed almost 9% lower at INR 4,928. The stock is likely to fall to INR 4,600-INR 4,625 Tuesday, Vipin Kumar, assistant vice president – technical and derivatives at Globe Market Capital, said. 

 

The Directorate General of Civil Aviation had Saturday issued show-cause notices to IndiGo's Chief Executive Officer Pieter Elbers and Chief Operating Officer Isidre Porqueras Orea for cancellation of several flights and causing inconvenience to customers. It gave a 24-hour extension to both officials to respond after Orea's request. The aviation regulator may ask IndiGo to cut flight frequencies to 300 flights per day till February after the cancellation of more than 5,000 flights so far in December, according to media reports.

 

Brokerages remain wary about the outlook for the company following its disruption in operations. The company's earnings for 2025-26 (Apr-Mar) may take a hit of 8–9% if IndiGo's disruption extends to 15 days in total, JM Financial Institutional Securities said in a report. "In the near-term, we estimate a 4% dip in our for Oct-Dec ASK (available seat kilometres) assuming an average 25% ASK cut over a period of 15 days during the quarter," the brokerage said. The brokerages believe the stock's current valuation is unsupportive and that the share price is yet to factor in structural cost increase driven by regulatory actions, one-time penalty, and management changes, if any.

 

Moody's Ratings Monday said the aviation regulator and the civil aviation ministry may impose penalties on IndiGo in the near future. The rating agency sees the company's profitability to be negatively impacted in FY26 and expects the airline player to see major financial damage from these flight cancellations. 

 

The fall in shares of InterGlobe Aviation pulled down the Nifty 50 by almost 0.1% Monday. The index closed 0.9% lower at 25960.55 points, with 46 out of its 50 constituents ending in the red. Technical analysts said there was extensive call writing in the current weekly expiry. "Options data is indicating oversold (scenario), but negative sentiments with supports around 25850 spot levels. The current short term chart structure is sideways in the 25750-26300 spot zone," Kumar said.

 

The expiry of the weekly derivatives contract of Nifty 50 is seen at around 26100-26150 points, Ashish Sherigar, technical analyst at NVS Brokerage, said. The highest call writing was at 26200 strikes of the Nifty 50, followed by 26100 and 26000 strikes, and major put writing was at 25900 strike, he added.

 

--Nifty 50 December closed at 26050.10, up 283.10 points; 89.55-point premium to the spot index
--Nifty 50 January closed at 26218.70, up 274.40 points; 258.15-point premium to the spot index
--Nifty 50 February closed at 26370.00, up 264.10 points; 409.45-point premium to the spot index

 

InterGlobe Aviation, Reliance Industries, BSE, HDFC Bank, State Bank of India, ICICI Bank, Eternal, Bharat Electronics, Vodafone Idea, Infosys, Kotak Mahindra Bank, JSW Steel, Multi Commodity Exchange, Hindustan Aeronautics, Hero MotoCorp, Bajaj Finance, Canara Bank, Vedanta, Bharti Airtel, and Axis Bank were the most actively traded underlying stocks Monday.  End

 

Edited by Tanima Banerjee

 

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