SpiceJet gains on receiving shareholder nod for equity fundraising

11 Jan 2024 , 11:34 AM

SpiceJet, a budget carrier, has got shareholder permission to fund Rs 2,250 crore, which the board previously authorized. The new capital will be raised through the issuing of equity shares and warrants.

The proposal was offered to shareholders for a vote during the company’s 39th annual general meeting.

The airline expects that the capital infusion would help to resuscitate its grounded jets, which are still weighing on the company’s financial results. SpiceJet plans to raise funds by issuing up to 32 crore equity shares and 13 crore convertible warrants at a price of Rs 50 each.

The proposed preferred issues include investors such as Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, and Nexus Global Fund, among others. SpiceJet, formerly a high-flying airline, has grounded up to 25 planes as it battles to repay its lessors.

SpiceJet’s grounded fleet has also reduced its market share to 5.4% as of October 2023, down from 7.3% the previous year, with competitors like IndiGo gaining. In the September quarter, financial losses were reduced by half to Rs 432 crore, owing mostly to cost-cutting efforts and spending reduction.

At around 11.35 AM, SpiceJet was trading 0.52% higher at Rs 65.78, against the previous close of Rs 65.44 on NSE. The counter rose to an intraday high of Rs 67.35.

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