SpiceJet's ₹3,000 cr QIP oversubscribed; shares surge 10%

SpiceJet’s Qualified Institutional Placement (QIP) worth ₹3,000 crore was oversubscribed, the airline informed today via an exchange filing. In addition to the QIP, the company secured an additional ₹736 crore from the previous funding round, bolstering the cash-strapped airline's financial position.

“In addition to the ₹3,000 crore raised through its QIP, SpiceJet will also receive an additional ₹736 crore from the previous funding round, further boosting its financial stability and growth plans,” the press release read.

The funds will be used for fleet expansion, network enhancement, and operational strengthening as part of SpiceJet's ongoing efforts to accelerate its growth plans, the company said in its official press release. This capital injection is expected to support the airline’s expansion into new markets and improve overall operational efficiency.

The QIP attracted a diverse pool of top-tier institutional investors and mutual funds, including prominent names like Goldman Sachs (Singapore), BNP Paribas Financial Markets ODI, Morgan Stanley Asia, Nomura Singapore Limited ODI, Discovery Global Opportunity Ltd, Tata Mutual Fund, Societe Generale ODI, Bandhan Infrastructure Fund, White Oak, Carnelian Bharat Amrikaal Fund, Authum Investment and Infrastructure Limited, The Jupiter Global Fund, and 360 ONE Equal Opportunity Fund.

“The strong response from investors and institutions is a testament to their faith in SpiceJet’s potential to rapidly scale and become a formidable player in India’s burgeoning aviation market. This fundraiser marks a pivotal moment for SpiceJet as we look to scale new heights in the aviation industry. With this new capital, we are determined to paint the skies red, once again,” said Ajay Singh, Chairman and Managing Director of SpiceJet.

The QIP was open from September 16 to 18. The fresh capital will be used to operationalise grounded planes, reportedly acquire 100 new aircraft, invest in technology, and expand into new markets.

Post the company announcement, shares of the domestic carrier zoomed 10%, hitting an intra-day high of ₹72.8 on the BSE. However, the scrip closed at ₹70.28 a unit, up 6.23% from the previous close of ₹66.16.

SpiceJet secured 99.8% approval via a postal ballot on September 13 to raise funds via Qualified Institutional Placement (QIP) and ₹736 crore from previous warrants and promoter contributions. This QIP comes at a time when the debt-ridden airline's financial struggles remain evident, as in August, the Directorate General of Civil Aviation (DGCA) reported a drop in SpiceJet's domestic market share to a record low of 2.3%, down from 5.6% earlier this year. This steep decline highlights the airline’s ongoing financial woes, compounded by disputes with lessors and by operational challenges like flight cancellations and placing 150 cabin crew on Leave Without Pay (LWP).