Cash-strapped budget airlines SpiceJet’s promoter Ajay Singh has initiated discussions with a Middle Eastern carrier for a stake sale of up to 24 per cent, those aware of the matter said. An Indian business conglomerate—eyeing entry into the civil aviation segment—is reportedly also in the fray.

Ajay Singh, Chairman and Managing Director of SpiceJet, currently has a promoter stake holding of 60 per cent, as per the last reports filed with the stock exchanges. Those aware of the discussions said Singh would continue to be the majority owner post the stake sale.

According to a company spokesperson, the airline’s management is in talks to secure “sustainable financing”.

“The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations,” the spokesperson said.

As on December 31, 2021 (nine month period of FY22), the company reported ₹5,484 crore of total income while losses stood at ₹1,268 crore. SpiceJet is yet to declare full results for the year ending FY22. The company said its Q4 results were delayed following a ransomware attack on its IT systems.

The airline had been making losses for the last three years. It incurred net losses of ₹316 crore, ₹934 crore and ₹998 crore in FY19, FY20 and FY21, respectively.

Market opinion divided

Aviation sector analysts are not convinced. According to one, the airlines – except for some brand value – do not own “any significant assets.” Neither does it have land banks or its own aircraft.

“Most of the aircraft are leased and even lessors are now asking for forceful repossession. This is more than indicative of the pressure on SpiceJet’s finances,” he said, requesting anonymity.

According to Satyendra Pandey, Managing Partner of aviation advisory firm, AT – TV, SpiceJet finds itself with an extremely fragile balance sheet, competing in a landscape where credit quality “is a key component of success”. “An equity infusion will certainly be a welcome change, but how valuation will be determined is up for debate,” he said.

Any potential equity stake by a foreign airline is effectively a market entry strategy as India continues to be buoyant in terms of passenger and cargo demand, Pandey said.


Cash-strapped SpiceJet has its share of woes. The airline has been trying to hive off its cargo division into a separate company and raise funds. However, that move too is yet to materialise.

The airline is already under pressure from at least two leasing companies who want back aircraft previously leased to the carrier. One of the them stated SpiceJet’s non-ability to pay rentals for seeking de-registration of the aircraft.

SpiceJet announced entering into “a full and final settlement with the Airports Authority of India (AAI)” to clear outstanding principal dues. The airline “will revert to an advanced payment mechanism” at AAI-run airports. The AAI had in 2020 put SpiceJet on a ‘cash and carry’ basis as it was unable to clear its previous dues.

The airline has also been in the news recently for a spate of incidents of technical malfunctions in its aircraft since June 19. Following this, India’s aviation regulator, DGCA, on July 27, ordered SpiceJet to operate no more than 50 per cent of its flights, which were approved for the summer schedule, for a period of eight weeks.

Meanwhile, shares of SpiceJet reacted sharply to the news and closed at ₹50.05, up nearly 13 per cent on the BSE on Wednesday. The company’s shares saw a volume spurt of 10.69 times. The stock extended its previous day’s rally. Shares had hit a 52-week-low of ₹34.60 a piece on July 28. Within seven days, the shares rose by nearly 45 per cent.