SpiceJet qualified institutional placement hits Street; shares dip

SpiceJet on Tuesday launched a qualified institutional placement (QIP) to raise Rs 3,000 crore. The private sector airline had set a floor price of Rs 64.79 per share for the sale of securities to qualified institutional buyers under the issue, days after its shareholders approved a proposal to raise up to Rs 3,000 crore through a mix of equity and debt.

SpiceJet shares ended weaker by Rs 4.1, or 5.2 per cent, at Rs 73.7 apiece on BSE.

The floor price indicated a discount of 16.7 per cent to the market price.  

As part of the arrangement, only certain eligible shareholders will be entitled to receive shares in the airline.

The QIP comes at a time when the airline is grappling with a crisis including financial challenges.

"Pursuant to Regulation 176(1) of the SEBI ICDR Regulations and in accordance with the approval of the shareholders of the Company accorded through a special resolution passed by way of postal ballot on September 13, 2024, the Company may at its discretion offer a discount of not more than 5% on the floor price for the Issue. The Issue price will be determined by the Company in consultation with the lead managers appointed in relation to the Issue," according to a regulatory filing. 

What is a QIP?

A qualified institutional placement (QIP) is a financial instrument that enables companies to raise funds by selling shares or other securities to select financial institutions, known as qualified institutional buyers (QIBs).

QIPs enable companies to raise capital quickly and conveniently. 

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