On March 17, 2024, SpiceJet made headlines with an exciting announcement: the airline’s founder, Ajay Singh, is set to invest Rs 294 crore into the company. This financial boost will come through the conversion of warrants into equity shares, ultimately raising the promoter group’s ownership from 29.11% to 33.47%. Singh, who also holds the position of Chairman and Managing Director, is channeling this investment via Spice Healthcare Pvt Ltd, a company linked to the promoter group.

A Strategic Financial Move

Singh’s decision involves converting 13.14 crore warrants into an equal number of equity shares, thus contributing Rs 294.09 crore to the airline’s capital. According to SpiceJet’s official announcement, this maneuver is designed to enhance the consolidated shareholding of the promoter group, solidifying their position within the airline.

To further bolster Spice Healthcare Pvt Ltd, Singh intends to divest up to 3.15 crore equity shares of SpiceJet. The funds raised from this sale will assist in meeting the remaining 75% of the amount owed during the equity share allotment linked to the warrant conversion.

Approval Pending for Equity Share Allotment

This capital infusion is a significant step in SpiceJet’s previously outlined fundraising strategy. The airline’s board or a designated committee is expected to convene by March 18 to green-light the equity share allotment, which is crucial for executing this conversion plan.

Strengthening Financial Stability

Singh articulated that this investment is pivotal for enhancing the airline’s financial viability and supporting its growth trajectory. He views the conversion of warrants and subsequent capital injection as a vital component of SpiceJet’s turnaround strategy amid various challenges.

Positive Market Reaction

In response to this announcement, SpiceJet’s stock experienced a notable surge, climbing over 4% to reach Rs 47.30 per share during morning trading on the Bombay Stock Exchange (BSE).

Just last Thursday, Singh had sold nearly 1% of his stake in SpiceJet for Rs 52 crore through an open market transaction. The airline’s latest financial report revealed a net profit of Rs 26 crore for the quarter ending in December 2024, showcasing an overall improvement in performance.

This strategic investment signals a strong commitment from Singh to not only stabilize but also propel SpiceJet toward future growth and success in the aviation market.