SpiceJet’s share price saw a significant increase of 4.5 percent, reaching Rs 59.79 per share on the BSE on Friday, July 26. This surge followed a Supreme Court (SC) decision to dismiss a petition filed by Kalanidhi Maran, which contested a Delhi High Court ruling that had overturned an arbitral award in Maran’s favor.
Supreme Court Ruling SpiceJet’s share
The Supreme Court upheld the Delhi High Court’s decision, stating that the High Court was “justified” in sending the case back for reconsideration because the single judge had “not applied his mind at all.” On May 17, 2024, the Delhi High Court had overturned its previous order that upheld the arbitral award favoring Kalanithi Maran and against SpiceJet.
SpiceJet and its chairman Ajay Singh had sought to set aside the part of the award that directed them to refund Rs 270 crore to Kal Airways and Maran. They also requested the High Court to waive off a 12 percent interest on the warrant and to set aside the 18 percent interest granted in the award. Following the Supreme Court’s dismissal of Maran’s petition, SpiceJet’s share price rose to Rs 59 per share by 1:05 PM, a 3.2 percent increase compared to a 1.2 percent rise in the benchmark indices.
Financial Performance and Fundraising Plans
On July 15, 2024, SpiceJet’s share reported a consolidated net loss of Rs 423.7 crore for the financial year 2023-24 (FY24), a significant improvement from the consolidated net loss of Rs 1,513 crore in FY23. However, the airline’s total revenue declined by approximately 14 percent, dropping from Rs 9,897 crore at the end of FY23 to Rs 8,524 crore in FY24.
Despite these challenges, SpiceJet’s share reported a net profit of Rs 126.9 crore for the March quarter of FY24, compared to a net loss of Rs 6.2 crore in the same quarter of FY23 and a net loss of Rs 299 crore in the third quarter of FY24. The airline’s total liabilities were Rs 11,690.7 crore at the end of the March quarter, down from Rs 12,420.2 crore as of December 2023.
In a bid to strengthen its financial position, SpiceJet’s board approved a plan on July 23, 2024, to raise Rs 3,000 crore through a qualified institutional placement (QIP) route. Earlier in the year, the airline’s shareholders had approved the issuance of equity and warrants to raise Rs 2,241 crore, out of which the airline successfully raised Rs 1,060 crore.
The recent Supreme Court decision and SpiceJet’s proactive financial strategies highlight the airline’s efforts to navigate through its financial challenges and stabilize its operations. The boost in share price reflects investor confidence in the company’s direction and the potential for recovery and growth.
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