Facing financial challenges over several quarters, SpiceJet, the Indian airline carrier, has announced that its board is actively exploring avenues to raise fresh capital. The airline, grappling with a cash crunch, is considering the issuance of equity or convertible securities on a preferential basis. This move is aimed at addressing the financial strains the company has faced in recent times.
SpiceJet’s Financial Struggles:
The financial situation of SpiceJet has been a cause for concern, with the airline reporting a consolidated net loss of ₹1,507 crore in the first three quarters of FY23. The delayed announcement of fourth-quarter results, coupled with a history of losses, underscores the gravity of the challenges faced by the airline. SpiceJet reported consecutive net losses of ₹302 crore in FY19, ₹937 crore in FY20, ₹1,030 crore in FY21, and ₹1,744 crore in FY22.
Effect on Equity Shares:
In response to SpiceJet’s announcement about considering fresh capital infusion, the market reacted positively. The company’s shares experienced a nearly 4% surge, reaching Rs 30.5 in Monday’s trade on the Bombay Stock Exchange (BSE). The anticipation and optimism surrounding the potential injection of capital through the issuance of equity shares and/or convertible securities have contributed to this positive market response.
As SpiceJet’s board deliberates on the options for raising fresh capital, the airline industry and financial markets are closely watching the developments. The move to consider equity share issuance is indicative of the company’s commitment to addressing its financial woes and ensuring a sustainable future. As the decision unfolds on July 12, it will not only impact SpiceJet’s financial trajectory but will also be a key moment for stakeholders and the aviation sector as a whole.
