Shares of budget carrier SpiceJet gained as much as 9% on Monday after a media report said that the Ajay Singh-led airline is among the companies that have shown interest in acquiring beleaguered Go Air.

The SpiceJet stock opened at ₹53.66 against its previous closing price of ₹53.58. The counter soared 9% in intraday trade today to hit a high of ₹58.30 on the BSE. The low-cost airline’s market share jumped to ₹3,950 crore. Shares of SpiceJet have gained 49% in 2023 and 52% over the past month.

SpiceJet's domestic market share rose to 6.2% in November from 5% in October. The cash-strapped carrier's market share was below 5% in the quarter ended September.

This comes days after SpiceJet's board approved fundraising of ₹2,250 crore by issue of equity shares on a private placement basis to financial institutions, foreign institutional investors (FIIs), high networth individuals (HNI) and private investors. The proposed preferential issues comprises 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.

"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.

The proposed fund infusion will go a long way in enhancing product presence and market reach of SpiceJet, the Gurugram-headquartered airline said. The capital raised will be instrumental in funding operational expansion initiatives, including fleet enhancement, route network expansion, and technological advancements.

SpiceJet's losses narrowed to ₹428 crore for the quarter ended September compared with a loss of ₹835 crore in Q2 FY23. The airline had clocked a net profit of ₹205 crore for the quarter ended June.

“The July-September quarter has historically been a challenging period for the aviation industry. This year, the challenges were further compounded by elevated fuel prices, impacting operational costs. SpiceJet, however, has been proactive in implementing cost-saving measures and remains focused on adapting to the dynamic market conditions,” Singh said.

“The airline continues to explore avenues for growth and profitability in the evolving market and the fresh infusion of over INR 2,250 Crore in the Company will bring renewed energy to adapt to the changing circumstances,” he added.

In May, Nusli Wadia-owned Go First filed for voluntary insolvency resolution proceedings before the National Company Law Tribunal in Delhi. The beleaguered carrier commanded a market share of 7.8% in the January-March quarter and flew 29.11 lakh passengers in the first three months of 2023.

Go Air’s debt stood at ₹3,513 crore as of March 2023. Go Airlines was incorporated in 2004 and began the services under the brand name, Go Air, in 2005. Later in 2021, the company rebranded itself from ‘Go Air’ to ‘Go First’.

Go Air insolvency

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NCLT principal bench to hear Go Air insolvency plea today