Budget carrier Spicejet is looking to raise between Rs 1,000-Rs 1,200 crore fresh equity infusion, according to sources familiar with the matter. After the company on Wednesday announced that its board is meeting on December 11 to consider capital raising, the airline company’s shares skyrocketed as much as 20 per cent on Thursday.
Spicejet on Wednesday in a regulatory filing on December 6 said its board of directors in its meeting scheduled on December 11 “will discuss and consider, inter-alia, options for raising fresh capital through issue of equity shares and/or convertible securities on preferential basis”.
“The company is looking anywhere between Rs 1,000-Rs 1,200 crore fresh equity infusion,” one of the sources told news18.com.
Shares of Spicejet have surged 32 per cent in the past one month, compared with the Sensex’s rise of 6 per cent.
Avinash Goraskshakar, head of research at Profitmart Securities, said, “SpiceJet, with its market capitalisation currently standing at around Rs 4,000 crore, appears to be significantly undervalued when compared to its peers in the Indian aviation industry. A substantial equity infusion into the airline can turn around the fortunes of the 18-year-old airline.”
For reference, the market capitalisation of IndiGo is Rs 1.1 lakh crore. “This stark difference in market capitalisation positions SpiceJet as an attractive investment opportunity, offering substantial growth potential and attractive returns for investors,” he said.
On Thursday, Spicejet shares opened at Rs 45 per share on the BSE, which was 3.25 per cent higher than the previous close of Rs 43.58 apiece. They shares then started surging and after one-and-a-half hours at around 10:45 am, they hit the upper circuit rising 20 per cent to Rs 52.29.
The Spicejet shares on Thursday closed the day at Rs 52.29, a 20 per cent gain.
NCLT On Spicejet
Meanwhile, on December 4, in a relief to low-cost carrier SpiceJet, the National Company Law Tribunal (NCLT) dismissed an insolvency petition by aircraft lessor Willis Lease Finance Corporation which is claiming dues. A two-member Delhi-based NCLT bench rejected the plea moved by US-based Willis Lease Finance Corporation after SpiceJet questioned the maintainability of the petition.
SpiceJet opposed the plea contending that Willis Lease Finance Corp has withdrawn its insolvency plea for the same dispute in March 2023 and has approached again with a new plea. During a hearing in July this year, the NCLT bench wanted to know from Willis Lease Finance Corp, as to how it filed a fresh petition again for a similar cause of action within a few months, without even sending a notice to SpiceJet as per the provisions of the Insolvency and Bankruptcy Code, 2016.
Besides Willis Lease, SpiceJet is facing insolvency pleas filed by three other aircraft lessors — Aircastle Ireland Ltd, Wilmington, and Celestial Aviation.
During a hearing in September, the NCLT suggested settling with its lessors, which have filed a plea to initiate insolvency proceedings against it. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear its dues.
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