Why Goldman, Morgan Stanley are betting on SpiceJet despite all its troubles
SpiceJet has received a near-term tailwind with institutional investors lapping up its Rs 3,000 crore share sale. Foreign investors who have been allotted shares under the airline's Qualified Institutional Placement (QIP) include big names such as Goldman Sachs, Morgan Stanley, Societe Generale, Nomura Singapore and Discovery Global Opportunity (Mauritius) Ltd. The QIP was oversubscribed with 87 Indian and international institutions subscribing to the issue. In addition to the Rs 3,000 crore raised through its QIP, SpiceJet will also receive an additional Rs 736 crore from the previous funding round, further boosting its financial stability and growth plans.
Why are big investors betting on recovery of SpiceJet despite the airline struggling with a wide range of issues from aircraft leases to staff salaries? Investors not only hope that SpiceJet is resilient enough to survive its manifold crisis but also consider the growth prospects of India's aviation sector.
Also Read: SpiceJet shares rally 6% after Rs 3,000 crore QIP attracts marquee investors
Hope for SpiceJet floats on a bright sectoral outlook
The recapitalisation, its chairman and managing director Ajay Singh has told ET in an interview, is not only important for the company, but also for India’s aviation sector, which is turning into a duopoly between IndiGo and the Air India group. “The sector has a lot of space. What is important is that we don’t allow a duopoly to be created and that it remains a competitive market, where customers have choice,” he
