SpiceJet shares surge 9% today; here’s why

Shares of budget airline SpiceJet surged 9% during the intra-day trade after the company announced plans to induct 10 planes by November-end. Ajay Singh-led airline says seven of these aircraft will be acquired on lease, while three previously grounded SpiceJet planes are being reintroduced into service.

The airline has signed agreements for the leased aircraft, with the full induction of all expected by November 15. Two have already arrived in India and are scheduled for immediate induction, says SpiceJet. The company says it will also operationalise its grounded planes in phases, with the first three set to re‐enter service before the end of November.

This fleet expansion follows SpiceJet’s Qualified Institutional Placement (QIP), which raised ₹3,000 crore. Investors like Goldman Sachs (Singapore), Morgan Stanley Asia, Tata Mutual Fund, and Discovery Global Opportunity Ltd took part in it. In addition to the QIP, the airline is set to receive an additional ₹736 crore from a previous funding round, it says.

"The fresh capital raised will play a key role in ungrounding SpiceJet’s existing aircraft, acquiring new planes, investing in technology, and expanding into new markets," says SpiceJet.

According to Ajay Singh, CEO, SpiceJet, with the capital raised, SpiceJet is well‐positioned to offer improved services and an expanded network. "We are committed to delivering seamless, reliable, and affordable travel, and we are excited about the future for both the airline and our passengers."

On September 24, SpiceJet resolved its dispute with Engine Lease Finance Corporation (ELFC) through an amicable settlement. "ELFC previously claimed $16.7 million, and the settlement has been reached for an undisclosed amount, which is lower than the initial claim. This resolution marks another significant step towards strengthening SpiceJet’s financial health," says SpiceJet.

Shares of SpiceJet, meanwhile, hit the day's high at ₹63 on the BSE, up 9% today, taking the company's m-cap to ₹7,974 crore. The scrip is trading 21% lower than the 52-week high of ₹79.90 touched on September 16, 2024.

SpiceJet shares have risen 80.29% in the past year, but its year-to-date return stands at just 2.57%. In the past six months and one month, the company share has fallen 3.26% and 2.64%, respectively.

SpiceJet Ltd., which released its Q3 and Q4 FY24 numbers after a gap of several months in July, reported net profit at ₹119 crore for the fourth quarter ended March 31, 2024, compared to ₹17 crore in the same period last year. The company's revenue dipped 20% to ₹1,719.37 crore against ₹2,144.85 crore a year ago. For the fiscal year ended March 31, 2024, SpiceJet reduced its losses by nearly 73%, reporting a post-tax loss of ₹409 crore YoY. Revenue dipped about 20% YoY to ₹7,050 crore in 2023-24.