Domestic carrier SpiceJet on March 17 said that its Chairman and Managing Director (CMD), founder, and promoter Ajay Singh will infuse ₹294.09 crore into the company, through promoter group company Spice Healthcare.
This will be conducted through the conversion of 13,14,08,514 warrants into an equivalent number of equity shares, SpiceJet told the exchanges.
SpiceJet CMD Ajay Singhto Infuse ₹249 crore: Details
“Spice Healthcare Private Limited, a promoter group company, has converted 13,14,08,514 warrants into an equivalent number of equity shares of SpiceJet,” SpiceJet said during market hours on March 17.
“Ajay Singh, a promoter of Spicejet, intends to dispose of up to 3.15 crore equity shares of the company and utilise the proceeds to enable Spice Healthcare Private Limited to partially fund the balance of 75 per cent of the amount at the time of allotment of the equity shares,” it added.
So, what does this mean for SpiceJet?
Notably, this “strategic move” effectively increases the consolidated shareholding of the promoter group in SpiceJet from the current 29.11 per cent to 33.47 per cent, as per the statement.
Further, the statement notes that the development demonstrates “the Promoter Group’s continued confidence in SpiceJet’s long-term growth potential and strategic direction” and is part of the airline’s “turnaround strategy”.
“This fresh infusion reaffirms our unwavering commitment to the airline and its bright future. This investment will further strengthen our financial position and drive growth. SpiceJet has always been a resilient airline and with this fresh capital, we are well positioned to enhance our operations and seize new opportunities,” Singh said in his statement.
SpiceJet Stock Price Reacts to Promoter Infusion
On the news, SpiceJet’s share price climbed over 5 per cent in morning trade on the BSE. SpiceJet share price opened at ₹45.20 against its previous close of ₹45.48 and jumped 5.4 per cent to the level of ₹47.93.
Around 9:55 am, the stock traded 5.12 per cent higher at ₹47.81 and at time of writing, at 12:25 pm, the stock was slightly lower, but still above opening price at ₹45.75 apiece. The airline stock hit a 52-week high of ₹79.90 on September 16 last year and a 52-week low of ₹39.91 on February 18 this year.
The infusion will be approved by the board on or before March 18, 2025, as per the statement.
Interestingly, on March 13, Singh sold 1,15,38,462 shares of SpiceJet, representing a 0.89 per cent stake in the company, via block deals on March 13, according to official data available on the BSE.