FIIs increase stake in Q1: Multibagger airline stock under Rs 80 in focus as Board announces fund raise of Rs 3,000 crore; Check floor price and other details
The stock gave multibagger returns of over 120 per cent from its 52-week low of Rs 34 per share.
Today, shares of SpiceJet Ltd plunged 2.88 per cent to Rs 75.55 per share from its previous closing of Rs 77.79 with an intraday high of Rs 76.39 and an intraday low of Rs 72.85. The stock gave multibagger returns of over 120 per cent from its 52-week low of Rs 34 per share.
SpiceJet, the Indian low-cost airline, has secured the necessary approvals to raise up to Rs 3,000 crore through a Qualified Institutional Placement (QIP). This capital infusion will help the airline address its financial challenges and bolster its operations.
The QIP was approved by the company's board of directors in July 2024 and subsequently endorsed by shareholders in a postal ballot held in September 2024. The final details, including the issue opening date and floor price, were set by the Fund Raising Committee on September 16, 2024. The floor price for the QIP has been set at Rs 64.79 per share, representing a 16.6% discount to Monday's closing price. At this indicative issue price, the QIP is expected to result in an equity dilution of approximately 38 per cent
SpiceJet plans to use the proceeds from the QIP to address its liabilities, restructure agreements with lessors, and expand its fleet. The airline aims to revive grounded aircraft and add new planes to its fleet, which will help it regain market share. The airline has been struggling with a cash crunch, which has led to a decline in its market share and operational challenges. This capital raise will provide the necessary resources to address these issues and ensure the airline's long-term sustainability.
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Earlier, the company has successfully restructured its debt with Carlyle Aviation, securing significant financial relief. Carlyle Aviation has written off USD 40.17 million in lease arrears and converted USD 30 million into SpiceJet equity at INR 100 per share, substantially increasing its stake. This strategic investment reflects Carlyle Aviation's confidence in SpiceJet's future growth. Additionally, the agreement includes converting USD 20 million in lease arrears into CCDs of SpiceXpress & Logistics, providing further financial support to its subsidiary and strengthening its position in the logistics market. Overall, this restructuring is expected to bolster SpiceJet's financial position, accelerate its growth plans, and enhance its competitiveness in the Indian aviation market.
SpiceJet is India's favourite airline that has made flying affordable for more Indians than ever before. SpiceJet is an IATA-IOSA certified airline that operates a fleet of Boeing 737s & Q-400s and is one of the country's largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The majority of the airline's fleet offers SpiceMax, the most spacious economy-class seating in India.
According to Quarterly Results, the company reported net sales of Rs 1,708 crore, operating profit of Rs 49 crore and net profit of Rs 158 crore in Q1FY25. In its annual results, the company reported net sales of Rs 7,085 crore, an operating loss of Rs 644 and a net loss of Rs 424 crore in FY24.
The company has a market cap of over Rs 6,000 crore. According to the shareholding pattern of June 2024, FIIs bought 8,85,885 shares and increased their stake to 1.81 per cent compared to 1.73 per cent in March 2024. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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