SpiceJet shares soar 5% ahead of annual general meeting

Shares of SpiceJet surged as much as 5.46% to hit an intraday high of ₹65.60 apiece on the BSE in early trade on Wednesday, ahead of the company’s annual general meeting on January 10, where the low-cost carrier is planning to seek the shareholders' approval to raise ₹2,250 crore. The company aims to utilise the fund to enhance the low-cost airline’s product presence and market reach as well as to expand its fleet, route network and technological advancements.

The scrip opened higher at ₹64, up 2.89%, as against the previous closing price of ₹62.20. At 10:44 am, the company’s stock was trading 3.55% higher at ₹64.41. In contrast to this, the broader BSE Sensex was trading flat at 17.02 points lower at 71,369.19. The company’s market capitalisation stood at ₹4,400.29 crore with more than 56 lakh shares exchanging hands as against the two-week average of 51.06 lakh shares. The company hit a 52-week high of ₹69.20 on December 19 last year and a 52-week low of ₹22.65 on May 23 last year.

In the past one month, three months and one year, the counter has given 17.06%, 79.20% and 73.68% in returns, respectively. In the year-to-date period, the counter has given 6.12% in returns.

Last month, the beleaguered airline received the board’s approval to raise a fresh capital of over ₹2,250 crore via the issuance of equity shares on a private placement basis to financial institutions, foreign institutional investor (FII)’s, HNI’s (high net worth individuals) and private investors.

The proposed preferential issues comprise investors like Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund and many more for issuance of equity shares and equity warrants aggregating to over ₹2,250 crore.

The total number of securities proposed to be issued is up to 32,08,05,972 of ₹10 each, while up to 13,00,00,000 warrants will be convertible at the option of the investor into an equivalent number of equity shares of ₹10 each. The issue price has been fixed at ₹50 apiece.

"This is a significant fund raise and it is designed to strengthen SpiceJet’s financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth in the dynamic aviation sector," said Ajay Singh, chairman and managing director, SpiceJet, last month. 

Notably, in the July to September quarter of FY24, the company’s losses narrowed to ₹428 crore as against ₹835 crore in the same period last year. Meanwhile, the beleaguered airline raised ₹500 crore in July last year in order to strengthen its financial position.

Since the beginning of March 2020, SpiceJet has been grappling to maintain a strong cash position and balance sheet. The recent bankruptcy filing by rival GoFirst also threw the spotlight yet again on it, with many convinced it may be next in line. But the airline's chairman and managing director Singh has so far proved his skeptics wrong.

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