Given the improvement in the financial situation of airlines, low-cost carrier IndiGo has said that its plans of fund raising through Qualified Institutional Placement or QIP stood a 50-50 chance.
Addressing shareholders at its 17th Annual General Meeting held in virtual mode due to the on-going COVID-19 pandemic on Friday, IndiGo Chief Executive Office (CEO) Ronojoy Dutta said while the airline board had passed an enabling resolution for a QIP to raise funds, whether IndiGo would ultimately go for it or not depends on how the sales revenue side develops.
“At this point in time, I would like to say that there is a 50:50 chance of the QIP happening,” Ronojoy Dutta said.
Dutta’s statement was in response to shareholders quizzing the management about the requirement of fundraising when the airline had a good cash balance and had already undertaken multiple measures to cut costs.
IndiGo at the end of June, had a total cash balance of Rs. 18,449.8 crore comprising Rs. 7,527.6 crore of free cash and Rs 10,922.2 crore of restricted cash.
CEO Dutta disclosed that IndiGO’s fleet utilisation was at 30-35% (planned at 40%) and that it was adding capacity aggressively. He also mentioned that there were no plans of inducting widebody aircraft and it’s plans for accepting delivery of it’s first Airbus 321 XLR as scheduled for 2024 (1st Quarter).
The AGM also for the first time saw the airline’s co-promoter Rakesh Gangwal in attendance from Maryland, United States. Gangwal had in January conveyed an EGM for removing various provisions in the company’s Articles of Association (AoA), that prevents either of the co-founders from buying publicly-listed shares in InterGlobe Aviation and potentially triggering an open offer for the rest of the company. He however did not attend this EGM.
The differences between the co-founders and co-promoters, Rakesh Gangwal and Rahul Bhatia, came to the fore in July 2019 after Gangwal sought the Securities and Exchange Board of India’s (SEBI’s) intervention to address alleged corporate governance lapses at the company. Bhatia and InterGlobe Enterprises (IGE) Group have around 38 per cent stake in InterGlobe Aviation.