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IndiGo sees improvement in financials, says chances of raising funds through QIP is 50:50

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IndiGo today said that the financial situation of the airlines is improving as India reopens and they may not utilise the option of raising money through sale of equity shares, as announced earlier.

“The plan to raise money through QIP has a 50-50 chance and the preferred path is to increase sales revenue,” IndiGo president Ronojoy Dutta said at the Annual General Meeting (AGM) today.

He added that the cash burn is down to Rs 30 crore from Rs 40 crore a day when started and the fleet utilisation is in the range of 30-35%, which the airline hopes to increase further – an indication that things are improving for airline companies.

The airline had, in August, announced plans to raise up to Rs 4,000 crore through an issue of equity shares by way of a qualified institutional placement. The announcement was made as the airline needed money to fund its losses, which was mainly due to two-month long lockdown.

Airline companies, which are the worst hit due to COVID19 and the lockdown, are seeing some signs of returning to normalcy after states started relaxing quarantine and entry norms.

IndiGo reported a consolidated net loss of Rs 870.81 crore in the March quarter from a profit of Rs 596 crore a year ago and also reported its highest quarterly loss of Rs 2,844 crore for the first quarter of this financial year.

The losses were due to a surge in cost, amid lower revenues, compounded by flight restrictions to international sectors that saw an increase in Covid-19 cases.

Dutta also announced that there is no plan to hire wide body aircraft to the fleet and the airline would wait for the XLR delivery, which is scheduled to arrive during the first quarter of 2024.

IndiGo, however, was looking to wet lease long-haul aircraft and launch international charter flights but the airline did not go ahead with the plan.

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