InterGlobe Aviation, the parent company of India’s largest airline, IndiGo, has authorised a request to raise up to Rs 3,000 crore from its shareholders.
Qualified Institutional Placement would be used to raise the cash.
The proposal’s remote e-voting period began on May 27 and ended on June 25. The proposal has been approved by the company’s shareholders, according to a regulatory filing made on Saturday.
The company’s board of directors gave its approval on May 10 to fund up to Rs 3,000 crore through the sale of shares to institutional investors, despite the airline industry suffering substantial headwinds due to the coronavirus pandemic.
IndiGo announced on June 5 that its consolidated net loss for the three months ended March was Rs 1,147.2 crore, owing mostly to a steep drop in revenues due to the pandemic.
The airline, which had 285 planes in its fleet at the end of March 2021, recorded a net loss of Rs 870.8 crore the previous year.
As a result of the pandemic’s considerable impact on air travel demand, the carrier’s consolidated total income fell by approximately 26% to Rs 6,361.8 crore in the fourth quarter of this fiscal year. In the March 2020 quarter, total income was Rs 8,634.6 crore.
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 the previous quarter, and that the cash burn is projected to increase further in the June quarter given the current circumstances.
He had stated that maintaining the cash position remained the major emphasis, We are continuing to collaborate with all of our partners. We’re working on obtaining a credit line from lenders and negotiating a sale and leaseback agreement for the new aircraft for this purpose.
He had predicted that these two moves will result in an additional liquidity of Rs 45 billion (Rs 4,500 crore) for the coming year.
Apart from that, we have also received board clearance for raising money through a qualified institutional placement up to Rs 30 billion (Rs 3,000 crore), and the shareholders are considering this proposal, he had said.
The company’s net loss for the fiscal year ending March 2021 increased to Rs 5,806.4 crore from Rs 233.7 crore in the previous fiscal year.
In the previous financial year, total income plummeted by 58 per cent to Rs 15,677.6 crore. In the previous year, the figure was Rs 37,291.5 crore.