SpiceJet’s Strategic Move: Board Approves Major Share and Warrant Issue

In a significant development for Indian aviation, SpiceJet, a prominent airline based in Delhi, has taken a major step in strengthening its financial position. As per a filing with the Bombay Stock Exchange (BSE) on January 26, 2024, the airline’s board of directors has approved the allotment of a substantial number of equity shares and warrants.

This move follows the green light from SpiceJet’s shareholders for a capital raising of INR 22.5 billion (approximately USD 270.6 million), a decision later ratified by the BSE. This capital infusion is intended to alleviate liabilities, fuel growth, and reinforce the low-cost carrier’s (LCC) balance sheet.

Ajay Singh, SpiceJet’s Managing Director, expressed optimism about this development. He emphasized that the fund infusion will pave the way for a more cash-efficient operation, expansion of the fleet, and network enhancement, thereby signaling a new era for SpiceJet.

The first tranche of this financial maneuver includes the issuance of 55,500,000 equity shares and 93,300,000 warrants. The beneficiaries of the first tranche of share allotments encompass a diverse group of entities and individuals, ranging from All Trade Consultants Private Limited, receiving 4,000,000 shares, to Vishal Nitin Sampat, who will be issued 500,000 shares. This comprehensive list highlights the varied investor interest in SpiceJet’s growth trajectory.

The shares are being issued at INR 5 (USD 0.06) each, with a face value of INR 10 (USD 0.12) each. Furthermore, the first allotment of warrants will see Elara India Opportunities Fund Limited receiving 83,300,000 warrants and Silver Stallion Limited being allotted 10,000,000 warrants, both issued at the same price as the shares.

Ajay Singh remarked on the successful completion of the first tranche of the preferential allotment, noting the investors’ confidence in SpiceJet’s future. He reaffirmed the airline’s commitment to progressively completing the further allotment process.

This financial initiative comes at a crucial time, as indicated in last week’s BSE filing, which mentions SpiceJet’s ongoing efforts to complete another tranche of equity/warrants raise from remaining subscribers. The airline has sought additional time from the BSE to finalize this process, underlining its determination to solidify its financial foundation and embark on a new chapter of growth and expansion.