SpiceJet Raises ₹3,000 Crore To Address Financial Challenges

Struggling low-cost carrier SpiceJet announced on Saturday that its board has approved the issuance of 48.70 crore equity shares to qualified institutional buyers at a price of ₹61.60 per share. This capital raise aims to secure ₹2,999.99 crore to address a range of operational challenges, including a reduced fleet and various legal and financial hurdles that the airline is currently facing.

In a regulatory filing, the airline detailed that the fund-raising committee has approved the issue and allotment of 48,70,12,986 equity shares to eligible buyers at a premium of ₹51.60, which includes a discount of ₹3.19 per share, equating to 4.92% of the floor price. With this allotment, SpiceJet’s paid-up equity share capital will increase from ₹794.67 crore, representing 79.46 crore equity shares, to ₹1,281.68 crore, which will now comprise 128.16 crore equity shares.

This announcement follows shareholder approval obtained last week for a capital raise of up to ₹3,000 crore, underscoring the airline’s urgent need for financial support. As of September 15, SpiceJet reported statutory dues totaling ₹601.5 crore. Additionally, the airline’s shares saw a decline of 3.25%, closing at ₹66.16 on Friday.

Recent reports indicate that SpiceJet’s market share shrank to 2.3% in August, reflecting the impact of ongoing financial difficulties and an increase in grounded aircraft, as noted by Emkay Global Financial Services. The airline’s situation highlights the pressing challenges within the Indian aviation sector.