On December 12, SpiceJet’s board of directors authorized the plan to raise Rs 2,254 crore by issuing 320.8 million new equity shares at an issue price of Rs 50 apiece and up to 130 million convertible warrants.
64 allottees, including Prabhudas Lilladher Advisory Services, LKP Finance, Martina Developers, and Fincon, will receive convertible warrants from SpiceJet. When markets closed on December 11, SpiceJet’s stock price of Rs 61.3 was 18.4% lower than the issue price of Rs 50.
The airline’s net loss for the quarter ending September 2023 dropped from Rs 837.8 crore to Rs 431.54 crore.
Following the release of its fundraising intentions and second-quarter financial data, the airline’s shares fell 9.7% on December 12, from Rs 61.49 to Rs 55.5.
The market capitalization of SpiceJet is Rs 4,000 crore. A 56.5 percent share in the company is held by promoters led by Singh, of which 37.9 percent is committed to several lenders.
The low-cost airline has ran out of money while it deals with several lawsuits related to unpaid debt, including those involving its previous promoters and aircraft lessors.
The company said in July that Singh would provide an infusion of Rs 500 crore in place of new equity shares, convertible instruments, or both.
SpiceJet’s chances of managing its finances and repaying debt have improved due to the combination of the growing profitability of the Indian aviation industry and the bankruptcy-driven departure of GoFirst, the low-cost carrier owned by Wadia Group.
SpiceJet narrowly increased its market share in August 2023, surpassing Akasa Air, which experienced a 30% increase in passenger traffic overall compared to the previous year.
In August, Singh invested Rs 500 crore in the business. “I am happy to have contributed to our airline’s growth by investing Rs 500 crore in it, as I firmly believe in its potential.” This investment will support our relentless efforts to restart our grounded aircraft, as well as our plans to build up our fleet and increase our cargo operations,” he had stated in a news release.
Due to the airline’s severe cash shortage, only a portion of its fleet operates with poor one-time performance, with roughly 40–45 percent of flights delayed each day.
According to industry analysts, SpiceJet overbooked a lot of flights or merged and canceled flights, which resulted in overbooking. This is why a significant number of passengers were refused boarding.
Data from the Directorate-General of Civil Aviation (DGCA) shows that, on SpiceJet flights, delays more than two hours impacted 189,634 passengers between May 2023 and October 2023. During this time, the airline compensated the passengers with Rs 3.78 crore.
SpiceJet incorrectly refused 991 passengers’ requests to board during that time, and therefore had to pay Rs 18.11 lakh in penalties. Similarly, the airline compensated Rs 1.33 crore for the approximately 16,131 passengers who were impacted by flight disruptions.
In the last six months, the airline’s stock has surged by almost 70% in spite of all the obstacles.
