SpiceJet plans to raise Rs 750 cr via QIP: Report

SpiceJet plans to raise Rs 750 cr via QIP: Report

Representative image. (DH photo)

SpiceJet is planning to raise around Rs 750 crore by selling new shares as the airline is facing liquidity crunch, according to a report in Business Standard. 

The airline is considering a qualified institutional placement (QIP) route to raise the money. Under QIP, listed companies can sell shares, fully and partly convertible debentures, or any securities other than warrants to a qualified institutional buyer.

The move comes as the airlines' operations took a severe hit due to prolonged grounding of the Boeing 737 MAX aircraft. Besides, fare war among rivals has been putting airline’s balance sheet under pressure.

According to the report, the airline's management had been holding talks with domestic funds, including Birla Sun Life Insurance Co and Axis Asset Management Co. “The company has held exploratory talks with the investors but hasn’t taken a final decision. Board approval and selecting a banker are pending. They are probably judging the appetite of the market and compensation from Boeing to finalise the size,” a person aware of the development told the newspaper.

Last month, SpiceJet chief Ajay Singh has called for lowering of taxes on the aviation sector to make it more competitive as well as ensure that the costs are in line with the peers. "I think (there is a need for) lowering of taxes and looking at aviation in a holistic sense as a job creator, as something that connects India to itself and to the world. It's important that we take a more holistic approach towards aviation," he had said.