IndiGo to Raise Rs 3,000 Crore via QIP

  • Stock Market News
IndiGo to Raise Rs 3,000 Crore via QIP
Credit: © Reuters.

By Aditya Raghunath -- Interglobe Aviation Ltd (NS: INGL ) on Monday said that its board approved raising funds worth Rs 3,000 Crore via a qualified institutional placement (QIP) of shares. This announcement comes in the backdrop of the aviation sectors struggling in India.

The second surge of the pandemic has caused severe restrictions on the mobility of people. Domestic business and leisure travel has come to a screeching halt while multiple countries including Canada, Australia, UK, and Germany have imposed some sort of travel bans on India.

Last week, a report called 'Key Trends in Indian Aviation in FY2022: Impact of Second Wave,' by aviation consultancy firm CAPA India said that the aviation industry is staring at a collapse, and consolidation in this space is inevitable. It said that the number of domestic airlines could come down to two or three from the current number of six players.

“Most Indian airlines were already very vulnerable prior to covid, with weak balance sheets and poor liquidity. Covid inflicted massive losses and an increasing debt burden on carriers that were structurally ill-equipped to absorb this impact,” said the report.

IndiGo has weathered the COVID storm pretty well and is trading at Rs 1,690 at the time of this report. The stock closed December 31, 2020 on Rs 1,723.3. To give context, Spicejet Ltd (BO: SPJT ) shares have fallen almost 30% from December 31 when they closed at Rs 94.95 to Rs 67.85 as of this report.

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