SpiceJet Ltd. said on Thursday that it has raised an additional Rs 316 crore through preferential issues, taking the total fundraise to Rs 1,060 crore.
It received the first tranche of Rs 744 crore late in January, more than a month after the low-cost carrier said it would raise Rs 2,250 crore through the issuance of securities to 64 investors, according to an exchange filing.
The airline allotted 4.01 crore shares to two investors, including Aries Opportunities Fund Ltd., and approved the allotment of 2.31 crore warrants to four investors, including Elara India Opportunities Fund Ltd., in a board meeting convened on Wednesday.
The warrants give investors the option to apply for and get an equivalent number of shares of the airline.
"With this additional funding, we are well-equipped to pursue our expansion plans and enhance our operational capabilities," Ajay Sigh, chairman and managing director of SpiceJet, said in a statement.
In a meeting with top company officials in January, Singh emphasised the importance of judicious spending, recognising that this opportunity for revival might not come again.
SpiceJet will lay off 15% of its workforce by March to cut costs, as it aims to turn around the airline with the help of fresh funds raised from investors.
The revival plan comes at a crucial time for the airline as it juggles poor operational performance, beaten down financials and a flurry of litigation.
SpiceJet shares rose as much as 7.65% to Rs 70.60 apiece after the fundraise announcement, the highest level since Feb. 19. It was trading 5.20% higher at Rs 68.99 apiece, as of 10:28 a.m. This compares to a 0.58% decline in the S&P BSE Sensex.
It has declined 94.34% in 12 months. Total traded volume so far in the day stood at 1.6 times its 30-day average. The relative strength index was at 55.18.
Out of three analysts tracking the company, one maintain a 'buy' rating, three recommend a 'hold', according to Bloomberg data. The average 12-month consensus price target implies a downside of 30.2.%.
In the quarter ended September, the budget carrier's consolidated net loss narrowed to Rs 449 crore from Rs 833 crore in the year-ago period. Revenue from operations fell 27% to Rs 1,429 crore.
Shares of the company were trading 6.36% higher at Rs 69.75 apiece, compared with a 0.43% fall in the benchmark Nifty 50 at 09:59 a.m.
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