SpiceJet stock zooms 10% as carrier raises Rs 3,000 crore via QIP; Goldman, Societe Generale among investors

SpiceJet stock has rallied 100 percent in the past one year, more than doubling investors' capital. In comparison, Sensex rose 28 percent.

Shares of SpiceJet zoomed up to 10 percent on September 23 after the airline raised Rs 3,000 crore by selling shares to qualified institutional buyers (QIBs), offering a significant boost for the struggling low-cost carrier.

SpiceJet had announced that it had secured approval to raise funds through a postal ballot held on September 13, a resolution, which received 99.8 percent approval. The debt-ridden airline had earlier revealed plans to raise Rs 2,500 crore through a QIP and Rs 736 crore from previous warrants and promoter contributions.

Foreign investors, including Societe Generale - ODI, Goldman Sachs (Singapore) Pte - ODI, Discovery Global Opportunity (Mauritius) Ltd, Authum Infrastructure and Investment, and Troo Capital, have been allocated shares in the airline's oversubscribed QIP.

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SpiceJet will also receive Rs 750 crore additionally from previous funding. "This fundraise marks a pivotal moment for SpiceJet as we look to scale new heights in the aviation industry," said chairman and managing director Ajay Singh. With this new capital, the airline is "determined to paint the skies red once again."

SpiceJet plans to use the proceeds from this QIP to tackle liabilities, restructure leases, and expand its fleet by reviving grounded aircraft and acquiring new ones. The airline's cash crunch is evident in monthly aviation data, revealing its market share dropped to 3.1 percent in July.

Additionally, SpiceJet placed about 150 cabin crew on Leave Without Pay (LWP) and had to cancel flights from Dubai.

According to the Directorate General of Civil Aviation (DGCA), SpiceJet's domestic market share fell to a record low of 2.3 percent in August, down from 5.6 percent at the beginning of the year. This decline underscores ongoing financial challenges, exacerbated by disputes with lessors and technical issues that have grounded a significant portion of its fleet.

At 10:50 am, SpiceJet shares were trading over 7 percent higher at Rs 70.80 on BSE. The stock has rallied 100 percent in the past one year, more than doubling investors' capital. In comparison, Sensex rose 28 percent. Year-to-date, the counter has risen around 16 percent compared to 17 percent rise in Sensex.

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