SpiceJet Shares soar
SpiceJet Shares gained more than 8% after the airline announced that QIP for ₹3,000 crore was fully subscribed on its final day: a strong vote of confidence from investors. Spices Jet’s shares surged to an intraday high of ₹74.7 per share as of September 19, 2024, driven by positive market sentiment, which had gained momentum after the successful reports of the QIPs. The stock had moved up till 9:18 AM with a spike of 3.44% and stood at ₹71.48 per share while showing robust outperformance against the broader market, wherein the BSE Sensex traded higher by 584.12 points at 83,532.35.
Sustained Investor Demand:.
According to a PTI report, QIP received a strong response from institutional investors, including large institutional funds and family offices. A few active family offices of Madhu Kela, Akash Bhansali, Sanjay Dangi, and Rohit Kothari feature among the many participants in the placement.
SpiceJet had offered a floor price of ₹64.79 per share. However, the company allows up to a 5% discount subject to the shareholders’ approval. Its intended raise of ₹3,000 crore for the airline would consider its financial commitments and liabilities accrued significantly over recent months.
Financial Liability Mitigation
The proceeds from the QIP would be used mainly to pay off the statutory dues and the outstanding liabilities. The statutory liabilities of SpiceJet had piled up to ₹601.5 crore on 15 September 2024. TDS accounted for ₹297.5 crore, while ₹156.4 crore pertained to employee provident fund contributions, and ₹145.1 crore was solely attributed to GST.
Apart from paying off these dues, the amount will be paid to the creditors which include the lessors of aircraft and engines, engineering vendors, and financiers thereby further strengthening the financial position of the airline.
Market performance and outlook
There is significant growth in the shares of SpiceJet, where it rose by 81.6% in a year compared to the BSE Sensex increase of 22.7%. This growth captures a rising optimism in the airline’s recovery as it seems to acquire more force in hopes of shining far into the future.
The management of SpiceJet clarified that it is confident about the success of QIP as this would be one of the essential steps toward stabilizing finances and helping the firm service operational commitments in fine fettle. That the placement has been oversubscribed also goes to show that investors have faith in the restructuring undertaken by the airline and its long-term survival.
With the airline looking for a way to wriggle out of its financial mess, a successful capital raise like this only gives it more strength to move on to a relatively sounder financial footing. This places the airline in an even better position to focus more on operational growth and expansion.
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Haider Shah