SpiceJet said that Acuite Ratings & Research has upgraded the company's long-term rating to 'ACUITE B+' from 'ACUITE D' with 'stable' outlook.
The agency has, meanwhile, affirmed the companys short term rating at ACUITE A4.
AcuitRatings stated that the upgrade in the rating takes into account the regularisation of the delays in the debt obligations from Yes Bank by Spice jet along with an improved liquidity position with the infusion of funds through QIP.
The company has raised Rs 3000 crore through QIP (qualified institutional placement) in September 2024., the major investors incudes Goldman Sachs, Morgan Stanley, Nomura Singapore, etc.
The company has planned to utilize this fresh QIP proceeds to pay off the all the statutory dues, settlement with their lessors, employee salaries, general corporate expenses, ungrounding of fleet, expansion from fresh fleets, etc. as per their revival plan in the aviation industry.
As per the management, they have cleared all the pending airport dues, employee salaries and statutory dues (GST & TDS) amounting to Rs 684.99 crore as on 30 September 2024.
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Currently, SpiceJet's operational fleet of is 24. SpiceJet is planning to settle with the lessors and few of the settlement already took place post QIP.
SpiceJet has booked revenue from operations of Rs 1,708.24 crore in Q1 FY 24-25 against Rs 2,003.59 crore in Q1 PY 23-24, thereby reducing the topline by 14.74%. This is mainly due to reduction in fleet size which led to declining market share over the period of time. The EBIDTA and net profits of the company is Rs 43.18 crore and Rs. 158.19 crore for Q1 FY 24-25 against Rs 265.46 crore and Rs 197.63 crore for Q1 PY 23-24 respectively.
However, the rating is constraint due to the weak earning profile dented through the continuous losses from FY 2019 till FY2024 accordingly impacting the financial profile and liquidity position. Further there remains an execution risk as per their revival plan in the aviation industry and timely repayment of their operational and financial creditors post QIP.
SpiceJet Limited was initially set up as an air taxi provider. In 1993, the company diversified into domestic aviation service provider. SpiceJet follows the low-cost carrier (LCC) business model with an objective to deliver the lowest air fares with the highest consumer value, to price sensitive consumers making flying accessible for the wider population.
The scrip slipped 2.97% to currently trade at Rs 59.75 on the BSE.
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