SpiceJet To Raise Rs 2,250 Crore Via Issuance Of Equity Shares To Investors

The airline also revealed that it has managed to almost halve its net loss to Rs 428 crore in the second quarter of the current fiscal year, against the corresponding period a year earlier.

The release stated that the proposed fund infusion would help the firm in increasing its product presence and market reach and would further assist the airline by providing it with a deep financial foundation. ( Image Source :Getty )

SpiceJet announced on Tuesday that it will raise more than Rs 2,250 crore via the issuance of equity shares to a raft of investors, including financial institutions and foreign institutional investors (FIIs). This decision should help the crisis-hit airline to manage its financial problems. 

The airline also revealed that it has managed to narrow its net loss by almost half to Rs 428 crore in the second quarter of the current fiscal year (July to September), against the corresponding period a year earlier. The carrier’s board authorised the issuance of equity shares/equity warrants under a private placement basis to several investors, subject to requisite approval, reported PTI.

The preferential issuance of securities will be done to various investors, including Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Ltd, Nexus Global Fund, Prabhudas Lilladher, and Resonance Opportunities Fund, SpiceJet informed via a release. However, details about the quantum of stake that the investors would have after fund infusion were not disclosed. 

The release stated that the proposed fund infusion would help the firm in increasing its product presence and market reach and would further assist the airline by providing it with a deep financial foundation. “The capital raised will be instrumental in funding operational expansion initiatives, including fleet enhancement, route network expansion, and technological advancements,” it added. 

SpiceJet chairman and managing director, Ajay Singh, called the move a ‘significant fundraise’ and said that it was designed to help the airline strengthen its financial position, boost operational capabilities and settle the outstanding dues. He noted that this would help the carrier prepare itself for sustainable growth in the aviation industry. 

Earlier, Singh had announced that he was working to infuse Rs 500 crore fresh capital into the airline. The release stated that out of the total amount, the company has already received Rs 200 crore. Further, the airline is also planning to list its securities on the National Stock Exchange.