SpiceJet gains 5% on fresh capital raising plan; stock up 12% in 4 days

However, in the past six months, the SpiceJet stock has underperformed the market by falling nearly 10 per cent, as compared to 13 per cent rally in the BSE Sensex.

Shares of SpiceJet gained 5 per cent at Rs 58.27 on the BSE in Friday’s intra-day trade in an otherwise subdued market after the airline firm said its board will meet on July 23 to consider raising fresh capital including qualified institutional placement (QIP). In the past four trading days the stock has rallied 12 per cent.

In an exchange filing the company said that a meeting of the board of directors of SpiceJet will be held on July 23, 2024 (Tuesday), inter-alia, to consider and approve raising fresh capital through issue of eligible securities to qualified institutional buyers by way of qualified institutional placement and any other methods including by way of further issue, in accordance with the relevant provisions of applicable laws.

The fund raising is subject to approval of the shareholders of the company and other applicable regulatory and contractual approvals, as may be required, it added.

At 09:46 am; SpiceJet was trading 4 per cent higher at Rs 57.61, as compared to 0.13 per cent decline in the BSE Sensex. The stock had hit a 52-week high of Rs 77.50 on February 5, 2024. However, in the past six months, SpiceJet has underperformed the market by falling nearly 10 per cent, as compared to 13 per cent rally in the benchmark index.

SpiceJet operates a fleet of Boeing 737s & Q-400s and is one of the country's largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The majority of the airline's fleet offers SpiceMax, the most spacious economy class seating in India.

Meanwhile, the Group incurred a net loss (after comprehensive income) of Rs 297.24 crore and Rs 545.8 crore for the quarter and nine months period ended 31 December 2023 respectively, and as of that date, the Group has negative retained earnings of Rs 8,022 crore and negative net worth of Rs 5,964 crore.

Losses over the last few years have been primarily driven by adjustments on account of implementation of Ind AS 116, adverse foreign exchange rates. operational disruption during Covid 19 followed by sub-optimal operations due to liquid.ity constraints faced by the Group, SpiceJet said in its December quarter results note.

On account of its operational and financial position, the Group has deferred payments to various parties, including lessors and other vendors and its dues to statutory authorities.

Where determinable, the Group has accrued for additional liabilities, if any on such delays in accordance with contractual terms/applicable laws and regulations and based on necessary estimates and assumptions. Additionally, the Group has also accounted for liabilities arising out of various litigation settlements. However, it is not practically possible to determine the amount of all such costs or any penalties or other similar Consequences resulting from contractual or regulatory non-compliances. The management is confident that they will be able to negotiate further settlements in order to minimize/avoid any or further penalties. Further, the Group continues to defend itself in certain litigations at various Appellate/Judicial levels, SpiceJet had said in a note.