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SpiceJet stock up as a company plan to list its securities on the NSE soon

SpiceJet-stock-up-as-a-company-plan-to-list-its-securities-on-the-NSE-soon

SpiceJet shares made a gap-up opening on the December 11 session, rising 5% to Rs. 58, reaching a 52-week high in early trade as the airline announced plans to list its shares on the National Stock Exchange (NSE). SpiceJet shares have risen over 140 percent from the time when stock bottomed in late May this year. The board of the cash-strapped airline SpiceJet will be meeting today to consider options to raise fresh capital and approve the unaudited standalone and consolidated financial results for the second quarter ended September 3. The options to raise fresh capital could include the issue of equity shares and/or convertible securities on a preferential basis, subject to the approval of the company's shareholders and appropriate regulatory approvals as required.

On December 5, the National Company Law Tribunal (NCLT) dismissed a plea filed by aircraft lessor Willis Lease Finance to initiate insolvency proceedings against the airline over unpaid dues. Around three aircraft lessors filed four insolvency pleas against SpiceJet in 2023 for non-payment of dues, while a tech services provider has also filed an insolvency plea against the airline.

Ajay Singh, the promoter of troubled domestic airline and once India's second-largest carrier by market share, SpiceJet, is in discussions with global private credit funds to raise $120 million–$144 million in fresh capital to pay pending salaries and revive its grounded fleet of 25 aircraft. In August, the airline told NCLT that it was "struggling to stay afloat" as it was ordered to repay money to its former owner. The debt-laden airline has been facing operational disruptions across India, delaying flight services recently in Pune, Patna, and New Delhi airports.

For the first quarter of FY24, the airline reported a standalone net profit of Rs 204.56 crore, compared to a net loss of Rs 788.83 crore in the year-ago period. The airline has yet to report its numbers for the September quarter. The airline has been in a vicious cycle where its lower fleet and higher debt do not allow the airline to earn enough to repay the debt or retire some of the debt and move towards profitability. The net worth remains negative, accumulated debt is high, and auditors continue to raise concerns about the airline being able to continue as a going concern.

Share of Spicejet at the time of reporting was trading at Rs. 63 with a YTD return of over 60%.

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