In a significant development for the aviation industry, Mumbai-based businessman Harihara Mahapatra and his wife Preeti have announced a substantial investment of Rs 1,100 crore in SpiceJet, a low-cost airline currently facing financial challenges. This investment, detailed in an exchange filing on Tuesday, reveals that the Mahapatras, promoters of Mahapatra Universal Limited, will jointly hold a 21.98% stake in SpiceJet.
This infusion of capital comes at a crucial time for SpiceJet, as it recently expressed interest in acquiring Go First, which is undergoing insolvency resolution directed by the National Company Law Tribunal. The low-cost carrier intends to submit an offer to the Resolution Professional post-diligence, aiming to create a robust and viable airline through a potential combination with SpiceJet.
About SpiceJet:
SpiceJet, which has been grappling with financial strains, sees this investment as a strategic move to bolster its position in the aviation sector. The news aligns with the airline’s recent statement in its Annual Report for FY23, where Chairman and Managing Director, Ajay Singh, announced plans to raise fresh capital exceeding Rs 2,240 crore (approximately USD 270 million).
Singh outlined the initiative, involving the issuance of equity shares to various stakeholders, including Financial Institutions, Foreign Institutional Investors (FIIs), High Net Worth Individuals (HNIs), and private investors. The primary goal is to strengthen the airline’s financial foundation and expedite its growth trajectory.
Notable investors participating in this capital-raising initiative include Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Group (highlighting the recent involvement of Harihara and Preeti Mahapatra), Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund, and others. Their involvement underscores confidence in SpiceJet’s potential and contributes to the airline’s strategic efforts to overcome financial hurdles.
The move to secure investment and explore acquisition opportunities reflects SpiceJet’s commitment to navigating challenges in the aviation industry and positioning itself for sustained growth. As the airline undergoes this transformative phase, stakeholders and industry observers will closely monitor its strategic moves and the potential impact on the broader aviation landscape.