Covid-19 impact: InterGlobe Aviation to raise Rs 4,000 cr through QIP

Topics IndiGo | Aviation | Coronavirus

As of June-end it had free cash of around Rs 7,500 crore, a 2.2% decline over last June
InterGlobe Aviation, the owner of the country’s largest domestic airline, IndiGo, will raise around Rs 4,000 crore through a qualified institutional placement (QIP), the airline announced on Monday, after its board approved the plan.

The fundraising comes even as the Covid-19 pandemic and travel restrictions continue to batter the aviation sector, resulting in limited operations and weak revenue growth outlook.
Founders and co-promoters Rahul Bhatia and Rakesh Gangwal own 74.86 per cent stake in the firm. At Monday’s closing price of Rs 952.90 on the BSE Sensex, the airline’s market capitalisation stood at Rs 36,667 crore.

 

 
The airline posted a pre-tax loss of Rs 2,842.6 crore in the first quarter of FY21 against a profit before tax of Rs 1,509.4 crore in the corresponding quarter a year ago. Revenue from operations fell 91 per cent year-on-year (YoY) with flight operations suspended for nearly two months.

While operations resumed from mid-May, industry-wide capacity and seat occupancy are far below last year’s normal. IndiGo, which has a fleet of over 250 aircraft, cut staff strength by 10 per cent last month as it anticipates delayed revival in air traffic.

The airline has a healthy cash balance. As of June, it had free cash of around Rs 7,500 crore, a 2.2 per cent decline over last year.


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel