Logistics

Indigo Airlines to explore QIP, other options, to raise funds

Our Bureau New Delhi | Updated on May 07, 2021

The pandemic has affected air travel in a big way   -  V_V_Krishnan

The company has not indicated the amount it will raise

Interglobe Enterprises, the company which runs Indigo Airlines, said on Friday that it would explore various mechanism including the Qualified Institutional Placement (QIP) to raise fund.

The Board of the company met here and post the meeting, it said in a filing to stock exchanges that the board deliberated the possibility of raising funds for the company through a qualified institutions placement. “The Board decided that the company should continue to explore all options to increase its liquidity,” the filing mentioned.

Earlier plans

Although the company has not indicated what amount to be raised but it may be noted that in January, it shelved plans to raise funds up to ₹4,000 crore through a QIP. Expectation is that the company might go for same amount in the coming days. The QIP is a mechanism to issue shares to public (mainly financial institutions) without using standing regulatory compliances. Of course, approval from regulator would be required.

Turbulent times

The company, which is largest in terms of market share, is having turbulent time as second wave of pandemic has affected air travel in a big way. Seat load factor has come down on all the key routes.

Ban on sale of food on flights with duration of up to 2 hours has affected revenue flow, while cost has gone up on account of various pandemic related measures.

The company has incurred loss during first three quarters and expected to repeat the same during January-March quarter of FY 2020-21. Its share closed with a loss of 1.45 per cent at ₹1,639.60 on Friday.

Published on May 07, 2021

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