BSE has granted approval to SpiceJet for fundraising activities.

SpiceJet, a budget airline, has secured preliminary approval from the BSE to raise INR 2,242 crore through the issuance of shares and convertible warrants on a preferential basis, according to the company's recent announcement. Ajay Singh, the Chairman and Managing Director of SpiceJet, emphasized the significance of this in-principle approval, considering it a crucial step for the airline as it endeavors to augment its capabilities and fortify its position within the Indian aviation sector.

The funds raised, totaling INR 2,242 crore, will be pivotal in propelling SpiceJet's growth trajectory. The allocation plan outlines diverse purposes, including expanding the airline's network, revitalizing grounded aircraft, and enhancing its overall competitiveness in the aviation industry. A substantial portion of the funds will also be directed towards settling statutory obligations, such as tax deducted at source (TDS), goods and services tax (GST), and provident funds (PF).

In the initial tranche, an allocation of INR 360 crore is earmarked for statutory obligations, INR 285 crore for settling past dues with creditors, and INR 355 crore by December 2024 for fleet-related activities, including uplifting and ungrounding, and acquiring new aircraft. Additionally, allocations are specified for aviation turbine fuel expenses, employee-related expenditures, and general corporate purposes.

The second tranche involves allocations for similar purposes, including statutory obligations, settlement with creditors, fleet-related activities, jet fuel expenses, employee-related costs, and general corporate purposes.

SpiceJet, aiming to capitalize on potential opportunities, views the fund infusion as a means to contribute to the growth of India's aviation sector. As of September 2023, the airline's net liabilities amounted to INR 12,584.9 crore, showing a decrease from INR 13,147.3 crore recorded in June 2023. 

Despite a 1.88% dip in SpiceJet shares on the BSE at 10:03 am, reaching INR 63.43 from the previous close, the announcement coincided with a day when benchmark indices achieved an all-time high.