Shares of SpiceJet Ltd surged as much as 6.2% to hit an intraday high of ₹65.40 apiece on the BSE after the low-cost domestic carrier reportedly informed its staff that a funding amount of ₹900 crore has been received by the airline this month. With the funding, the low-cost carrier aims to focus on upgrading its fleet and resort to cost-cutting measures amidst financial headwinds.
Boisted by the development, the share price of the budget carrier closed 4.40% higher at ₹64.29. This was in line with the broader BSE Sensex, which closed 1,240.90 points or 1.76% higher at 71,941.57.
The company's market capitalisation at the end of the trading session stood at ₹4,399.61 crore as more than 98.64 lakh shares exchanged hands as against the two-week average of 50.54 lakh shares.
According to reports, the no-frills airline, so far, has a bank balance of ₹900 crore. Of this, the low-cost carrier received ₹160 crore under the government’s Emergency Credit Line Guarantee Scheme (ECLGS). The recent funds also include an amount worth ₹200 crore infused by the company’s promoter Ajay Singh. Last year, Singh had announced its plans to infuse ₹500 crore by way of subscription to equity shares and/or convertible securities/equity share warrants on a preferential basis, to strengthen the financial position of the company.
Notably, the airline is leaving no stone unturned to come out of the double whammy of financial distress and legal struggle that the budget carrier has been facing over the last few years. In December last year, the carrier received the board’s approval for fundraising of ₹2,250 crore by issue of equity shares on a private placement basis to financial institutions, foreign institutional investors (FIIs), high networth individuals (HNI) and private investors. The proposed preferential issues comprises investors like Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund and many more for issuance of equity shares and equity warrants aggregating to over ₹2,250 crore.
Earlier this month, the budget carrier received in-principle approval from BSE for a fund infusion of ₹2,242 crore.
Notably, in order to put an end to its legal woes, the low-cost carrier, in September last year, completed its payment of $1.5 million to the global investment bank and financial services firm Credit Suisse as per the directive issued by the Supreme Court of India. The company also made a payment worth ₹77.5 crore and ₹100 crore, respectively, to its former promoter Kalanithi Maran's Kal Airways Private Ltd in September this year.
Meanwhile, in the July to September quarter of FY24, the airline’s net loss narrowed to ₹449 crore as against ₹830 crore in the corresponding period of the previous year. The company’s revenue from operations, however, 27% year-to-year to ₹1,429 crore.
