IndiGo scraps plans to issue QIP

IndiGo, India’s biggest domestic airline, has announced that it will now be raising capital through other financing options such as ‘Sale and Lease Back (SLB) transactions, and not be carrying its previous proposal to raise capital through qualified institutional placement (QIP).

Aditya Pande, IndiGo’s chief financial officer stated during the airline’s post result call that, “There are several financing options. The ongoing deliveries of neo aircraft (A320neo/A321neo) in FY 22 will bring further liquidity,” clarifying the company’s scrapping of the QIP plan but did not reveal any more information.

The plan was formed when the board of directors of IndiGo had in August 2020 approved the proposal to raise up to 4,000 crore through QIP transaction.

At the end of the December quarter, IndiGo had Rs 18,365.3 crore cash, including free cash of 10,920.7 crore. The total debt of the airline stood at Rs 27,726.10 crore during the same period.

The airline had recently reported a net loss of Rs 620.14 crore during the Q3 results, compared to Rs 1,194.83 crore losses in the quarter to September. IndiGo’s profit during October-December 2019 was Rs 495.97 crore.

Passenger demand had also stalled during the second half of December after the news of the spread of a new, more contagious and possibly even deadlier, variant of coronavirus came in.