SpiceJet Ltd shares plummeted dramatically in late trading on Tuesday after the airline announced its second-quarter earnings. The stock fell 8.70% to a day low of Rs 55.30 from its previous closing of Rs 60.57.
The budget carrier reported a net loss of Rs 428 crore in Q2 FY24, compared to a net loss of Rs 835 crore the previous year. However, its revenue fell nearly 30% to Rs 1,348 crore in the three months ending September 30, 2023.
"Historically, the July-September quarter has been a challenging period for the aviation industry." This year's issues were exacerbated by rising fuel prices, which impacted operational expenditures. SpiceJet, on the other hand, has been proactive in implementing cost-cutting measures and is committed to reacting to the dynamic market conditions," said SpiceJet CMD Ajay Singh.
Furthermore, the low-cost carrier said it would raise Rs 2,250 crore through the issuance of preferred shares and warrants as the beleaguered airline strives to resume full operations after grounding about a fourth of its fleet. It plans to offer shares worth Rs 1,600 crore and warrants worth Rs 650 crore. The issuance price per share is set at Rs 50.
The airline is still looking for ways to grow and profit in an evolving industry, and the new investment of around Rs 2,250 crore would provide renewed impetus to adapt to changing conditions, according to Singh.
Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Limited, Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund, and others are among the investors in the proposed preferential issuance.
