Shares of SpiceJet have fallen about 85% since the airline raised Rs 3,000 crore through a qualified institutional placement in September 2024, as foreign portfolio investors and offshore derivative buyers sharply cut exposure to the stock.
The airline raised funds at Rs 61.60 a share when the Nifty 50 index crossed 26,000 for the first time. The issue drew strong demand from foreign portfolio investors, including offshore derivative instrument buyers, pushing FPI ownership in the airline from 1.8% in June 2024 to 23% within a quarter.
The rally did not last. SpiceJet shares slipped into single digits in March 2026 and now trade near Rs 12. During the decline, several FPIs and offshore derivative clients exited the stock. FPI holding fell below 2% by March 2026. Public shareholding, which was below 40% in September 2024, rose above 50% by June 2025 and reached 71.5% by March 2026.
The sell-off in SpiceJet coincided with a wider withdrawal by foreign investors from Indian equities. FPIs pulled out close to $50 billion from Indian markets, the highest on record. Although global equities rebounded in April and several markets touched fresh highs, the Nifty remains about 8% below its peak.
Market Questions
Institutional participation in the SpiceJet issue drew attention because the airline was facing operational and financial pressure at the time of the fundraising.
SpiceJet's domestic market share fell from 7.3% in January 2023 to 2.3% in August 2024. Passenger traffic had nearly halved. The airline also operated in a market dominated by IndiGo and Air India, which together controlled most domestic traffic.
The QIP nearly doubled SpiceJet's paid-up share capital. The proceeds were used to clear statutory dues and settle liabilities with aircraft and engine lessors.
More than 80 institutions subscribed to the issue. Mauritius-based Discovery Global Opportunity and Aries Opportunities bought stakes of more than 3% each, while Troo Capital acquired around 2%. The issue was managed by JM Financial.
Large offshore derivative desks, including those of Goldman Sachs, Morgan Stanley and Societe Generale, also participated in the placement.
"The rationale of these opaque investors' intense participation is a puzzle," some market experts said.
"P-Notes have raised big concerns for decades, until SEBI's recent curbs on their opacity reduced fresh issuance," said R. Leelavathi Naidu, senior partner and head of financial services and compliance at IC RegFin, a Mumbai-based law firm.
"SEBI's concerns were on potential round-tripping - domestic money going offshore and returning to influence Indian markets," she said.
ODI Curbs
The Securities and Exchange Board of India moved in October 2007 to cap offshore derivative instrument positions and suspend fresh issuance. The proposal triggered a 1,700-point fall in the Sensex in a single trading session before the regulator withdrew the move.
SEBI later tightened disclosure rules. Regulations introduced in 2023 required dedicated FPI registration for ODI issuers, barred derivative-based ODIs and mandated disclosure of beneficial ownership down to the natural person level.
ODIs accounted for 44% of FPI flows in FY07 but dropped to 1.8% in FY25. Outstanding P-Notes also declined from Rs 2.40 lakh crore to Rs 1.36 lakh crore.
Participatory Notes allow overseas investors not registered in India to gain exposure to Indian securities through registered FPIs.
Anchor Investor
Mumbai-based non-banking financial company Authum Investment and Infrastructure emerged as the largest buyer in the SpiceJet QIP, investing about Rs 280 crore.
In February 2026, Authum invoked a pledge on 10.37 crore SpiceJet shares and started selling them in the open market.
Authum, formerly known as Pentium Investments and Infrastructures, is controlled by Sanjay Dangi and his family. In 2010, SEBI issued an interim order barring Dangi, three family members and 24 entities from the securities market over alleged manipulation in four stocks. The order followed an earlier probe into trading in Ackruti City shares. Dangi later challenged the order and was cleared.
Authum later acquired the stressed loan books of Reliance Commercial Finance and Reliance Home Finance under the Reserve Bank of India's resolution process. Lenders including Yes Bank, Union Bank of India and Bank of Maharashtra took haircuts in the process.
The Enforcement Directorate searched Authum's premises in July 2025 in connection with a money-laundering investigation linked to alleged fund diversion at Reliance Commercial Finance and Reliance Home Finance. The NBFC's shares hit the lower circuit the following day.
By March 2026, the ED had provisionally attached 31 properties worth Rs 581.65 crore in the case. Total attachments linked to the Anil Dhirubhai Ambani Group-related investigation stood at Rs 16,310 crore. The Central Bureau of Investigation also registered a case in December 2025 based on a complaint from Bank of Maharashtra alleging a Rs 57.47 crore fraud at Reliance Commercial Finance.
Legal Pressure
SpiceJet's recent share volatility has also been linked to ongoing litigation involving promoter Ajay Singh.
In February 2026, the Supreme Court dismissed Singh's petition challenging a High Court order directing him to deposit Rs 144.5 crore in a dispute involving Kalanithi Maran and KAL Airways. The court also imposed a cost of Rs 1 lakh on Singh.
An arbitral award in favour of Maran had directed repayment of Rs 308.21 crore with interest. After partial payments, the remaining disputed interest amount of Rs 144.5 crore became subject to the court-directed deposit.
SpiceJet, Authum and JM Financial did not comment on the matter.
Shrinking fleet size, debt obligations and higher fuel costs have added pressure on the airline as investors who backed the 2024 fundraising continue to exit the stock.
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