Tata Sons, Singapore International Airlines invest ₹750 crore in Vistara

Mumbai | Updated on August 10, 2021

This is the third time the carrier has raised funds in the last one year

Vistara has received fresh equity of ₹750 crore from its parent companies, Tata Sons and Singapore International Airlines.

According to documents reviewed by BusinessLine, Tata Sons Private Limited has infused ₹382.5 crore and Singapore Airlines Limited has infused ₹367.5 crore.

The fund infusion is via equity shares at nominal amount per share of ₹10. The total number of shares allotted is 75 crore. The documents were submitted to the Ministry of Corporate Affairs, which were accessed by Tofler.

In the past one year, this is the third time the full-service carrier has raised funds. In May, Tata SIA Airlines Limited, the owner of Vistara airlines, had raised $110 million through External Commercial Borrowings (ECBs).

Tata Sons and Singapore Airlines had infused an additional ₹465 crore.

So far, the two joint venture promoters have infused around ₹4,500 crore in the airline.

This comes even as the aviation industry has been deeply impacted by the Covid-19 pandemic.

For FY20, Vistara’s revenue was ₹47,384.6 crore. However, for FY21 it dropped by more than 50 per cent to ₹27,308.6 crore.

Losses widen

This comes even as it managed to reduce its expenses from ₹63,017.4 crore in FY20 to ₹43,405.8 crore in FY21. The airline's losses for the fiscal too widened. Despite this, the airline continues to expand. The carrier aims to have 70 aircraft fleet by 2023. Currently, its fleet include 36 Airbus A320s, two A321 neos, six Boeing B737-800NGs, and two B787-9 Dreamliners.

Other airlines including IndiGo, SpiceJet and GoFirst too are raising funds. While IndiGo and SpiceJet are raising capital, GoFirst is likely to hit the market by September via an IPO.

Aviation consultancy firm Capa India has forecasted that Indian airlines are likely to register a consolidated loss of about $4.1 billion in FY22. This will take the combined losses for FY21 and FY22 to about $8 billion.

To stay afloat, CAPA had said that an estimated $4.5-5.0 billion of funding will be required for the airlines.

Published on August 10, 2021

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