EW DELHI: The board of directors of InterGlobe Aviation Limited, which operates the country’s largest domestic airline IndiGo has approved raising up to ₹3,000 crores through a professional Institutions Placement (QIP) process, the corporate said during a stock market notification on Monday.
“…the Board of Directors of InterGlobe Aviation Limited (the “Company”), at its meeting held today, i.e., May 10, 2021, has approved the raising of funds for an aggregate amount not exceeding INR 3,000 Crores (Indian Rupees Three Thousand Crores) through a problem of equity shares by way of a professional Institutions Placement,” the corporate said adding that this is often however subject to shareholder and other regulatory approvals.
InterGlobe Aviation Limited’s board had earlier on 7 May met to think about raising funds through a QIP process.
It was then decided that the airline should still explore all options to extend its liquidity, including by way of a QIP, the corporate said during a stock market notification last week.
QIPs are how to issue shares to the general public without browsing standard regulatory compliance.
Interestingly, IndiGo had earlier in January shelved plans to boost funds up to ₹4,000 crores through a professional institutional placement (QIP), opting instead to boost money through sale and leaseback (SLB) transactions and other alternative options.
The airline has since then administered SLB of a couple of its aircraft.
SLB may be a transaction during which the owner sells the aircraft, then takes it back on lease from the customer. Such a deal typically removes the aircraft, and its associated debt, from the carrier’s record.
The latest decision by IndiGo’s board of directors comes at a time when airlines are battling a declining passenger demand thanks to an unabated rise in fresh covid cases across the country.
Fewer Indians took to the skies for the sixth week during a row for the week to eight May.
The average number of daily fliers stood at 82,000 for the week ended 8 May, down from 126,000 for the week earlier, consistent with a report by ICICI Securities.
Meanwhile, the second wave of infections, which has brought the country’s healthcare system to its knees, could precipitate a collapse of the domestic aviation sector, aviation consultancy firm Capa India said during a report last week.
IndiGo is going to be the sole carrier to emerge from the crisis significantly stronger due to its very strong record, the report said.
However, despite being better placed to face up to the newest downturn in traffic, IndiGo also will feel a really significant impact, it added. <