SpiceJet founder Ajay Singh’s decision to infuse Rs 294 crore into the airline is seen as a positive step towards long-term stability and strengthening the budget carrier’s financial position, though it remains to be seen if this will help the airline regain investor confidence.
SpiceJet’s shares rallied for the second consecutive session on Tuesday, surging to Rs 47.93 apiece. However, it is still far from its 52-week high of Rs 79.90, recorded last September when the airline raised Rs 3,000 crore in a qualified institutional placement (QIP) strengthening its financial position. This has enabled the resolution of major legacy liabilities, fleet expansion, and accelerated operational growth.
According to experts, the airlines’ recapitalisation in 2024 paved the way for a strong carrier to emerge, provided it continues to receive investments. With this infusion, SpiceJet seems to be making an effort to get back on track and Singh is leading from the front.
“The CMD’s fund infusion is a positive step, reflecting promoter confidence and providing immediate support. Reactivating the grounded fleet will further help, as reliance on wet-leased aircraft impacts costs and competitiveness. The key now is stabilising operations, raising more funds, and strengthening the network,” says Ravreet Singh, an aviation analyst.
The company has been slowly getting back on track. SpiceJet net worth turned positive for the first time in a decade and has reported a profit after tax (PAT) of Rs 26 crore in Q3FY25, marking a turnaround from a loss of Rs 300 crore in the same period last year. Its credit rating has also improved but the question is can it continue the momentum and attract investors?
“This quarter’s performance is a testament to SpiceJet’s resilience and our relentless focus on financial and operational recovery. For the first time in a decade, the company has turned net worth positive – an important milestone that underscores the success of our turnaround strategy. The past is behind us, and we are now firmly focused on building a stronger, more resilient future for SpiceJet,” Singh had told post the third quarter results.
However, the challenges continue as the promoter holding has dropped by nearly 50% since March 2022. According to reports, FIIs showed interest in September 2024 but exited major positions by December 2024.
On the operational front, the company has secured rights to operate Haj flights in Q1 FY26 from four key cities and is working on fleet expansion with the induction of 10 aircraft, including 3 previously grounded aircraft, during the quarter ending on December 2024. It launched 32 new flights for the winter schedule and a total of 60 new flights added since QIP.