SpiceJet's stock surged 20% higher as the board decided to examine fund-raising routes on December 11

7 Dec 2023 , 04:11 PM

After SpiceJet announced that its board will meet on December 11 to discuss alternatives for raising additional money, the company’s shares shot up 20% to reach the upper circuit and 52-week high of Rs 52.29 per share on December 7. 

The low-cost carrier’s shares increased 32% over the last month, while the benchmark Sensex saw a rise of 6%.

In a December 6 exchange filing, SpiceJet stated that it will convene on December 11 to explore and evaluate options for obtaining additional capital by issuing equity shares or convertible securities on a preferential basis, subject to shareholder approval and in compliance with applicable laws.

This comes after aircraft lessor Willis Lease Finance submitted a plea to begin insolvency proceedings against the airline over unpaid dues, but the National Company Law Tribunal (NCLT) rejected it.

In 2023, four insolvency petitions for non-payment of dues were filed against SpiceJet by about three aircraft lessors. A IT services company has filed an insolvency plea against the airline in addition to the lessors.

The heavily indebted airline has been experiencing operational problems all over India, recently causing aircraft services to be delayed at airports in Pune, Patna, and New Delhi.

Promoters’ stake in SpiceJet dropped from 58.98% in the June quarter to 56.53% in the September quarter.

Additionally, foreign institutional investors (FIIs) reduced their holdings from 0.35%in the previous quarter to 0.29% in September 2023.

Conversely, holdings by institutional investors fell from 0.37% in the prior quarter to 0.31% in the September quarter.

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