Synopsis: With the airline industry suffering significant challenges as a result of the COVID-19 pandemic, the company’s board of directors approved a Rs 3,000 crore share sale to institutional investors on May 10.
InterGlobe Aviation, the parent company which is the largest airline company of India, IndiGo, has authorised a request to raise up to Rs 3,000 crore from shareholders.
The funds are said to be raised via Qualified Institutional Placement.
The remote e-voting of the proposal began on May 27 and ended on June 25. The proposal has already been approved by the company’s shareholders, according to a regulatory filing on Saturday.
With the airline industry suffering significant challenges as a result of the COVID-19 pandemic, the company’s board of directors had approved a Rs 3,000 crore share sale to the institutional investors on May 10.
IndiGo has recorded a combined net loss of Rs 1,147.2 crore for the three months ended March 5th, owing mostly to a steep fall in their revenues due to the world-wide pandemic.
In the previous fiscal year, the airline, which had a fleet of 285 planes by the end of March 2021, had to bear a net loss of Rs 870.8 crore.
As a result of the considerable impact of the pandemic on air travel demand majorly due to lockdowns and bans, consolidated total income of the carrier fell more than 26 percent to Rs 6,361.8 crore in the 4th quarter of the current fiscal. Total income had reached Rs 8,634.6 crore in the March 2020 quarter.
On June 7, IndiGo Chief Financial Officer Jiten Chopra stated that the daily cash burn surged to Rs 19 crore in the March quarter from Rs 15 crore in the previous quarter, and that the cash burn is projected to increase even further in the June quarter with the current circumstances.
He had stated emphasising that managing the financial position remains as the top objective, and they will continue to collaborate with all their partners. To that aim, they are attempting to get a credit line from the lenders and to engage into a sale and leaseback agreement for the new aircraft.
According to him, these two moves will likely result in an additional liquidity of Rs 45 billion (Rs 4,500 crore) for the coming year.
Mr.Jiten Chopra also stated that, aside from that, they have obtained board approval for raising money through qualified institutional placements of up to Rs 30 billion rupees (Rs 3,000 crore), and this proposal is currently being considered by the shareholders taking account of the financial position and condition of the airline industry and the pandemic effects on it.
The company’s net loss hiked up to Rs 5,806.4 crore for the fiscal year ending March 2021, up from Rs 233.7 crore in the previous fiscal year. In the previous fiscal year, total income plummeted 58 percent to Rs 15,677.6 crore. In the previous year, the figure was Rs 37,291.5 crore.
