India's largest airline aims to raise money through a qualified institutional placement to counter the economic disruptions caused by the Covid-19 outbreak, which has upended air travel globally.
InterGlobe Aviation Ltd., the parent of IndiGo, said in an exchange filing on Monday that its board has approved raising about $534 million or nearly Rs 4,000 crore through the placement that involves selling shares to institutional investors.
IndiGo reported a loss of Rs 2,849 crore for the quarter ended June —its biggest—compared with the Rs 1,200-crore profit it clocked a year ago. As a result, the carrier's net worth fell by nearly half sequentially. The fresh fundraise is to help the airline shore up its net worth.
The rating agency ICRA had said the firm's liquidity profile would also weaken due to the current environment and external liquidity would help it better withstand the pandemic's adverse impact on passenger traffic.
IndiGo has already embarked on a cost-cutting exercise, bringing down its daily burn rate to Rs 30 crore from Rs 40 crore at the start of the pandemic. It has also taken multiple steps to save money by cutting jobs and slashing salaries.
The airline is focusing on strengthening liquidity and is working on cost structures as it takes various initiatives to reduce fixed costs, Ronojoy Dutta, chief executive officer of Interglobe Aviation, had said last month.
IndiGo's planning to raise more than Rs 5,000 crore by limiting expenditure and through sale and leaseback of assets, Aditya Pande, the airline's chief financial officer, had told analysts last month.
As on June, IndiGo had free cash of around Rs 7,527.6 crore—down from Rs 8,928 crore by March 20.
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