SpiceJet shares gain 10% as airline raises Rs 3,000 crore from institutional investors

SpiceJet, SpiceJet share price: Shares of low-cost airline gained 10 per cent on Monday as the company has raised Rs 3,000 crore through the sale of shares to qualified institutional buyers, providing a much-needed tailwind for the struggling airline. The counter opened at Rs 67.94, with a gain of 2.69 per cent from the previous close of Rs 66.16 on the BSE. It gained further to touch the high of Rs 72.8 - a surge of around 10.04 per cent.

The stock has gained after four days of consecutive fall and has outperformed the sector by 6.38 per cent.

Meanwhile, foreign entities, including Societe Generale - ODI, Goldman Sachs (Singapore) Pte - ODI, Nomura Singapore Ltd ODI and Discovery Global Opportunity (Mauritius) Ltd are among the investors who have been allotted shares under the airline's Qualified Institutional Placement (QIP) that was oversubscribed.

The airline's fundraising committee, on September 20, approved the allotment of more than 48.70 crore shares at a price of Rs 61.60 apiece to the more than 80 QIP participants, according to a regulatory filing.

The total amount for which the securities have been issued is nearly Rs 3,000 crore.

"Pursuant to the allotment of equity shares in the Issue, the paid-up equity share capital of the company stands increased from Rs 7,94,67,27,170 consisting of 79,46,72,717 equity shares to Rs 12,81,68,57,030 consisting of 1,28,16,85,703 equity shares," the filing made to the BSE on Saturday said.

SpiceJet, which has been flying for 19 years, is facing multiple headwinds and the latest fundraise will help the carrier to clear various dues.

Among others, the proceeds will be used for settling liabilities of creditors, including aircraft and engine lessors, engineering vendors and financiers.

Five allottees each have received more than five per cent of the shares offered in the QIP. They are Authum Investment and Infrastructure Ltd (9.33 per cent), Discovery Global Opportunity (Mauritius) Ltd (8.33 per cent), Troo Capital (6.67 per cent), Societe Generale - ODI (6.04 per cent) and Goldman Sachs (Singapore) Pte - ODI (5.33 per cent), as per another regulatory filing.

Earlier, sources said SpiceJet promoter Ajay Singh might be selling more than 10 per cent stake in the airline.

The shareholding pattern, post the issue, will be submitted in due course by the airline to the BSE.

While the latest funding will help SpiceJet in the near term, the airline will have to ensure stability of operations in the long term and improve its financial position amid intense competition in the airline segment.

In its preliminary placement document, the airline had said that due to financial constraints, it has not been able to fulfil the statutory liabilities accruing on us on a month-to-month basis.

As per the document, the airline has not made provident fund payments to the tune of over Rs 135 crore from April 2020 to August 2023, as per the document.

The carrier's statutory dues totalled Rs 601.5 crore as of September 15 and net proceeds from the placement will also be utilised towards clearing the dues.

Of the total amount, Rs 297.5 crore is towards deposit of Tax Deducted at Source (TDS), Rs 156.4 crore related to deposit of employees' provident fund, and Rs 145.1 crore pertains to Goods and Services Tax (GST).

With agency inputs