The Jet-Sahara deal is back in news once again. With just two days left for the deadline of the Air Sahara merger with Jet Airways [Get Quote], some crucial clearances are still pending.

The Directorate General of Civil Aviation (DGCA) is yet to clear Jet Airways' bid to buy the entire stake in Air Sahara for $500 million. Meanwhile, market analysts say that Jet's valuations will be positive if the deal doesn't go through.

Nikhil Garg of Edelweiss Capital says failure of the deal will be positive for Jet Airways, while Nikhil Vora of SSKI also feels that the deal falling through could be a boon for Jet Airways in the long term.

Nikhil Garg of Edelweiss Capital says that if the Jet-Sahara deal doesn't go through, then I think it is positive for Jet Airways.

Garg says, "I think Jet shareholders should wait and watch. Since the time the deal was done, valuations of Jet has fallen by around 35%. The valuation of Sahara was pegged to Jet's own valuation. So at this point of time, if Jet pays Sahara $500 million, then they would be overpaying by about 35%.

Garg further says that they have reduced their call on Jet, primarily because of negative industry factors like high crude oil prices and increasing competition. Plus, there is Indigo, which is supposed to start in August and is expected to have five aircraft by this year-end.

Nikhil Vora of SSKI also says that the falling out of the Jet-Sahara deal will be positive for Jet over the long term.

Vora says that he was always skeptical over this overvalued deal. He believes that the acquisition of Sahara would be an irritant for the performance of Jet.

Vora says, "I do not see any need to speculate significantly on this, whether really the marriage is on or not. We just have to wait for another day or two. We have historically been skeptical of this transaction for the valuation, which Jet Airways has supposedly paid to Sahara at around $500 million, which we believe has been significantly stretched in terms of the fair value of that business."

He further adds, "So in case transaction does not happen, over a longer time period, it may actually be a positive for Jet. Given that, I guess they need to grapple with a few other issues for their own operations, be it international operations or getting the yield curve up in the domestic part. So those are really issues, which we look out for. This acquisition of Sahara can only be an irritant for Jet."

Vora was earlier bearish on the Jet stock at Rs 1000. At Rs 630, Vora says that it is at a point, where one needs to take a call on the longer term, whether at $1.5 billion enterprise value of Jet, one gets 40% of Indian aviation and whether that really merits a second look or not.

Vora further adds, "I would not like to alter thoughts right now but certainly valuations are starting to come back to lower risk point to investors. Having said that, if the profitability of business starts to drop out, the way it has over the last few quarters if one looks at the yield, it is going to be sometime before investors start to make money in this."

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