SpiceJet Gets the Green Light for ₹30 Billion Capital Raising

SpiceJet Secures Board Approval for ₹30 Billion Capital Raise

The board of directors at SpiceJet have approved a capital raising of INR 30 billion rupees (approximately $400 million) during a board meeting held on July 23. The airline plans to raise the funds through institutional placements to qualified institutional buyers. This decision follows the board’s backing of a proposal in January to raise around INR 22.5 billion (approximately $300 million), of which around INR 10.6 billion (roughly $140 million) has been raised so far.

SpiceJet aims to use the funds to strengthen its balance sheet and improve its operations following a period of disarray. The airline stated that the funds would enhance operational efficiencies, fund technological improvements, and potentially go towards acquiring new aircraft. However, SpiceJet’s filing to the Bombay Stock Exchange did not specify the selling price for the shares.

As of now, SpiceJet is the sixth-largest domestic airline in India based on weekly available seat capacity, trailing behind IndiGo, Air India, Vistara, AIX Connect, and Akasa Air. Its domestic market share decreased from 5.4% in May 2023 to 4% in May 2024 due to a significant number of out-of-service aircraft. Currently, 35 of SpiceJet’s 56 planes are grounded, including various models such as B737-700s, B737-800s, and DHC-8-Q400s. To mitigate this, the airline is currently wet-leasing seven aircraft, bringing the number of operational aircraft to 28.

SpiceJet has recently reported its quarterly and yearly financial results. For the financial year ending on March 31, 2024, it reported a consolidated loss of INR 4.237 billion (approximately $56 million), showing improvement from the INR 15.13 billion (approximately $201 million) loss in the previous year. Notably, SpiceJet has incurred losses for six consecutive years.