Indian low-cost carrier SpiceJet has approved a fundraising initiative through a qualified institutional placement (QIP) of shares, which is expected to be completed by the end of September this year. It comes after reporting its fiscal year first quarter results. It aims to raise 30bn Indian rupees ($357.34 million) to “further strengthen its financial position and support its growth plans”, it said in an update. The troubled airline explained: “This fresh infusion of funds will be pivotal in enabling the airline to expand and unground its fleet, enhance operational capabilities, settle liabilities and improve its overall market competitiveness. These funds will stabilise the overall operations and allow expansion.” SpiceJet chairman and managing director Ajay Singh said the fundraising will “be instrumental in reinforcing our financial foundation and positioning SpiceJet for sustained success”. It follows the company’s board approving it to raise such funds through “issue of equity shares or any other eligible securities” to qualified institutional buyers. The board meeting was held on July 23, 2024. The board had previously approved raising fresh capital of approximately $270 million back in December last year through the issue of equity shares and warrants. Indian English-language outlet The Economic Times had reported on August 13, 2024, ahead of the QIP announcement, that Singh was likely to dilute his majority share in the company by selling over 10% stake as part of the fundraising. The outlet said his stake would likely fall to around 30-35%. The company reported revenues total revenues of INR20.7bn ($246.6 million) for the first quarter of the fiscal year ending June 30, 2024, down from INR22.7bn ($270.4 million) in the same period last year. It reported revenue from operations at INR16.5bn ($196.5 million) in the quarter, down from INR19.2bn ($228.7 million) last year. Expenses totalled INR19.2bn ($228.7 million), down from INR20.7bn ($246.6 million). Its profit for the quarter was INR1.6bn ($19.1 million) in the period, down from INR2bn ($23.8 million) last year. Basic earnings per share for the quarter were INR2.01 ($0.024), down from INR3.28 ($0.039) a year prior. The Indian airline said in its report: “On account of its operational and financial position, the Group has deferred payments to various parties, including lessors and other vendors and its dues to statutory authorities.” Total liabilities at the end of the quarter were INR1.13 trillion ($13.5bn), while its total assets were valued at INR62.3bn ($742.1 million). The BSE Indian stock exchange has also sought clarification from SpiceJet regarding an article from The Economic Times article on August 12, 2024. The article had said the airline delayed June salaries after “pressing operational financial commitments” and would shortly disburse the pay. The outlet had claimed to have seen a copy of an email sent to pilots on August 8, 2024. The exchange said it is awaiting a reply.
SpiceJet approves $350 million fundraising, reports quarterly earnings
