India’s IndiGo sees uptick, may not deploy share issue

IndiGo Airlines (6E, Delhi Int’l) may decide not to pursue the fundraising initiatives it was looking at in July and August, as revenue from sales continues to increase. In July, the board of directors of parent holding InterGlobe Enterprises opted to “further deliberate” on capital-raising measures such as a share issue and the offer of foreign-currency convertible bonds or non-convertible debentures. In mid-August, it announced in a stock market filing that it had approved a plan to raise up to INR40 billion rupees (USD545 million) through a share issue by way of a Qualified Institutional Placement (QIP). However, the message at InterGlobe’s annual general meeting on September 4 was that the company’s financial situation is improving as India reopens and that the option of raising money by selling equity shares may no longer be needed, the Economic Times reported. “The plan to raise money through a QIP has a 50-50 chance, and the preferred path is to increase sales revenue,” IndiGo chief executive Ronojoy Dutta said at the video-conference meeting. On July 29, IndiGo posted its highest quarterly loss of INR28.443 (USD387 million) for the first quarter of this financial year, ending June 30. But Indian carriers are starting to see an upward trend in travel demand. Cash burn is down from INR400 million (USD5.45 million) to INR300 million (USD4 million), and fleet utilisation is in the range of 30-35%, a figure the airline plans to increase further, Dutta said. Dutta reiterated that there is no plan to add widebody aircraft to the fleet at least until it takes its first A321-200N(XLR) narrowbodies, now set to start in the first quarter of 2024.