Airline Stock Gains 6% On Receiving Rs 900 Crore Funding, Stock Up 123% In 6 Months; Get Details Here

Shares of SpiceJet Ltd zoomed 5.98% higher at Rs 65.26 per share at 12:53 pm IST on Monday, amidst bullish trading on Dalal Street. SpiceJet shares rallied after a news report highlighted that the fresh Rs 900 crore funding coming in this month, will help the low-cost carrier focus on the upgradation of its fleet and cost-cutting measures, as the no-frills airline works on ways to come out of turbulent times.

According to a PTI report citing an internal note to the senior staff on Monday, the airline said it now has a substantial bank balance of more than Rs 900 crore, including Rs 160 crore received as an installment under the government's Emergency Credit Line Guarantee Scheme (ECLGS).

The carrier, which had been facing several headwinds in recent months, has so far received around Rs 1,000 crore under the ECLGS. The latest installment came recently after its Chairman and Managing Director Ajay Singh infused funds into the airline, according to an official in the know.

Singh has so far put in Rs 200 crore out of the Rs 500 crore fund infusion that he had announced last year.

According to the official, the airline has garnered a total of over Rs 1,100 crore funds in three months.

Last week, the airline said it has received Rs 744 crore as the first tranche of funds being raised through allotment of securities on a preferential basis.

On December 12, the airline had said it would raise fresh capital of Rs 2,250 crore through issuance of securities.

In an exchange filing on January 26, the company said SpiceJet Ltd. has allotted shares and warrants totaling Rs 744 Crore on a preferential basis in the first tranche.

As per the filing, on January 25, 2024, the Company's Board of Directors approved the allotment of 5.55 Crore equity shares on a preferential basis to 54 subscribers. Additionally, the Board approved the allotment of 9.33 Crore warrants, offering the option to apply for and be allotted an equivalent number of equity shares, on a preferential basis to Elara India Opportunities Fund Limited and Silver Stallion Limited.

At that time SpiceJet said that it was due to complete another tranche of equity/warrants raised from remaining subscribers and requested additional time from the competent authority to complete the process under the ongoing preferential issue, as approved by the shareholders of the Company on January 10, 2024.

Last year, the airline said it would raise fresh capital of Rs 2,250 crore via issuance of securities.

Currently, the airline has an operational fleet of around 40 planes. SpiceJet, which has also shown an interest to bid for bankrupt Go First, will be looking to raise more funds to improve its financial position.

SpiceJet share price performance:

SpiceJet shares have gained 122.94% in the last six months. In the last three months, the stock has gained 78.70%. Returns from SpiceJet shares have gained 84.69% in the last one year. The stock has a 52-week high and 52-week low of Rs 69.20 and Rs 22.65 respectively.