Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 790.52 ACUITE B+ | Stable | Reaffirmed -
Bank Loan Ratings 659.48 - ACUITE A4 | Reaffirmed
Total Outstanding 1450.00 - -
Total Withdrawn 0.00 - -
 
Rating Rationale

Acuité has reaffirmed its long-term rating to ‘ACUITE B+’ (read as ACUITE B plus) and short term rating to 'ACUITE A4' (read as ACUITE A four) on Rs. 1450.00 Cr. bank facilities of SpiceJet Limited. The outlook is 'Stable'.

Rationale for rating
Acuite notes that three Irish lessors and a former pilot have filed petitions under Section 9 of IBC (Insolvency & Bankruptcy Code), seeking initiation of insolvency proceedings against SpiceJet claiming dues totalling USD 12.68 million (about Rs 110 crore). All the petitions are directed to list in the next hearing as per information available in the public domain. These petitions will be key monitorable in near to medium term by Acuite. 

The reaffirmation in the rating reflects the significant fund raise in the last 15 months and further infusion of funds expected in next six months from promoter's contribution & share warrants which will further provide the additional liquidity cushion and will help in improving overall operations of the company. These funds will be utilized for ungrounding of existing fleet, new fleet induction, settlement with the lessors, etc. As on 31st December 2024, SpiceJet has an unutilized funds of ~ Rs. 619 Cr. in the form of fixed deposit from last fund raising round. However, these above strenghts are offset by intensely competitive, highly regulated industry which is further exposed to volatility in the prices of fuel and foreign exchange risk. 

About the Company
­Established in 1984 and based in Gurugram (Haryana), SpiceJet Limited was initially set up as an air taxi provider. In 1993, the company diversified into domestic aviation service provider. SpiceJet follows the Low-Cost Carrier (LCC) business model with an objective to deliver the lowest air fares with the highest consumer value, to price sensitive consumers making flying accessible for the wider population. SpiceJet, a public limited company, is listed on Bombay Stock exchange (BSE) and National Stock Exchange (NSE) and is promoted by Mr. Ajay Singh with majority holdings.
 
About the Group
  • ­Canvin Real Estate Private Limited incorporated in 2017. The company is engaged in real estate development for residential, commercial and industrial purposes and other allied activities. Mr. Ajay Singh and Mrs. Shiwani Singh are the directors of the company. The registered office of the company is in New Delhi.
  • Spicejet Merchandise Private Limited incorporated in 2016. The company is engaged in business of trading of goods. Mr. Ajay Chhotelal Aggarwal and Mrs. Shiwani Singh are the directors of the company. The registered office of the company is in New Delhi.
  • Spice Shuttle Private Limited incorporated in 2019. The company is engaged the business of operation of small aircraft chartering aircraft, helicopters and allied air vehicles. Mr. Ajay Singh and Mr. Ajay Chhotelal Aggarwal are the directors of the company. The registered office of the company is in New Delhi.
  • Spicetech System Private Limited incorporated in 2020. The company’s line of business is providing information technology and related support activities. Mr. Ajay Singh and Mrs. Shiwani Singh are the directors of the company. The registered office of the company is in New Delhi
  • Spicejet Technic Private Limited incorporated in 2016. The Company is engaged in providing technological services related to aviation, aerospace and defence industry. Mr. Ajay Singh and Mrs. Shiwani Singh are the directors of the company. The registered office of the company is in New Delhi.
  • Spice Xpress and Logistics Private Limited incorporated in 2019. The Company is to be engaged in the business of providing cargo services. Mr. Easwaran Sundaram, Mr. Kamal Kartar Hingorani, Mr. Ajay Singh and Mrs. Shiwani Singh are the directors of the company. The registered office of the company is in New Delhi
 
Unsupported Rating
­Not Applicable. 
 
Analytical Approach

Extent of Consolidation
•Full Consolidation
Rationale for Consolidation or Parent / Group / Govt. Support
­A­cuité has considered the consolidated business and financial risk profiles of SpiceJet Limited and its subsidiaries to arrive at the rating.
Key Rating Drivers

Strengths
­Experienced management and healthy business model with diversified revenue streams
SpiceJet, a Low-cost carrier segment airline provider, has established presence in the Indian aviation industry. Mr. Ajay Singh, the Chairman and Managing Director of SpiceJet, has more than 15 years of experience in the line of aviation and is involved in the day-to-day operations of the company. In the past, through his extensive and rich experience, Mr. Singh successfully turnaround SpiceJet Limited by undertaking and implementing various measures in revenue and cost management, customer retention and employee welfare. SpiceJet, over the years with its established presence in the aviation industry has been able to diversify its revenue stream for its cash generation. The company majorly has two streams; Primary (Passenger air travel), Ancillary (Preferred Seating, Business Class, Spice Max, Loyalty Programmes, Insurance, Meals, Spice Vacations, Lounge, Visa, Cab, Cargo, Onboard Merchandise), and, Cargo business. The company has also added aircrafts for passenger and cargo operations on wet lease basis. Acuité believes that the presence of diversified revenue stream and robust fleet will aid SpiceJet’s revenue profile over the medium term.

Significant fund raise and its utilization
SpiceJet has raised Rs. 3000 Cr. through QIP (Qualified Institutional Placement) in September 2024The. allotment of QIP is to the pool of 87 top tier institutional marquee investors which includes Goldman Sachs (Singapore), Morgan Stanley Asia, BNP Paribas Financial Markets ODI, Nomura Singapore, Tata Mutual Funds, Discovery Global, Autumn Investment, among others. As on 31st December 2024, they have cleared all the statutory and employee dues. The balance unutilized funds of approximately Rs. 619 Cr. will be used for ungrounding, maintenance expenses, new fleet induction and settlement with lessors. 

SpiceJet is set to receive another Rs. 676 Cr. in near term from promoter's contribution and share warrants. The company is expecting to turnaround in the operations from the additional infusion to be made in medium term. 

Weaknesses
­Weak financial position
The group’s financial risk profile is poor marked by negative net worth of Rs. 5,233.05 Cr. in FY 2024 against negative Rs. 5,851.67 Cr. in FY 2023. The Company had raised funds in FY 23-24 through preferential share issue of approximately Rs. 1060 Cr. Further, the debt-equity ratio of the company stood at (0.22) times in FY24 against (0.20) times in FY23. The interest coverage ratio of the company stood at 1.71 times in FY24 against 0.04 times in FY23. The DSCR of the company stood at 0.71 times in FY24 against 0.04 times in FY23. The TOL/TNW ratio stood at (2.23) times in FY24 against (2.33) times in FY23. Acuite believes that with fresh proceeds from QIP, the financial risk profile of SpiceJet Group will improve in near future.

Susceptible to volatility in aviation fuel prices and fluctuation in foreign exchange rates
The aviation turbine fuel (ATF) is one of the major cost component of SpiceJet which accounts around 35 - 40 per cent of the revenue of the company. The ATF prices are directly linked to the crude oil prices which remain volatile and the company incurs a major part of its operating expenses like lease rentals, aircraft maintenance and repairs in foreign currency. The profitability of SpiceJet is highly susceptible to the volatility in ATF prices and fluctuations in foreign exchange rates. Further, the company faces intense competitions from other LCC operators in the industry which restricts SpiceJet to pass on any increase in prices to its customers. Nevertheless, higher proportion of fuel efficient Boeing Max aircrafts to be operated by the company in the near future is likely to partially offset the risk of volatility in ATF prices to a certain extent.

Declining Market Share
SpiceJet’s market share dropping over the years from 17.9% in 2014 to 14.9% in 2020 when pandemic hit India. In 2022, the market share further drastically falls to 7.6% followed by 5.5% in 2023. Early this year, it further declined from 5.6% in January 2024 to 3.47% in December 2024. Acuite believes that market share of SpiceJet will improve in near future with ungrounding of fleet and induction of fresh fleet in near future.
ESG Factors Relevant for Rating
Environment
Environmental issues related to the air transport industry is a key concern. GHG emissions, air pollutant emissions, environmental management, energy efficiency, ESG reporting and waste management are significant environmental issues for this industry.
Social
Labour management issues, such as employee safety & development and employment quality, is a crucial issue in air transport industry. Furthermore, key material issues such as community support & development, product quality & safety, human rights, equal opportunity and responsible procurement have a significant impact on the social scores for this industry.
Governance
Air transport industry is highly exposed to governance risks associated with regulatory compliance, board oversight, business ethics and corrupt practices. Furthermore, inadequate anti-takeover mechanism, management & board compensation, board independence & diversity, audit committee functioning, financial audit & control and shareholders’ rights are the key material issues for this industry.­
 
Rating Sensitivities
  • Optimum and timely utilisation of QIP
  • Movement in financial risk profile
  • Settlement and restructuring of operational creditors
  • Traction in the fleet size
 
Liquidity Position
Adequate
­The liquidity profile of the group is adequate marked by Rs. 3000 Cr. proceeds raised through QIP out of which Rs. 619 Cr. is the unutilized balance amount available in their deposits as on 31st December 2024. They will utilize these proceeds to pay off the operational creditors, settle with lessors, ungrounding of fleet & induction of new fleet. Further, the company is set to receive additional proceeds of Rs. 676 Cr. by September 2025  in form of promoter’s infusion and other share warrants in near term. The group has the cash & bank balance of Rs. 203.11 Cr. as on 31st March 2024. The group generated net cash accruals of Rs. 329.40 Cr. in FY 2024. Acuite believes that the group will be able to improve liquidity in near future with having additional proceeds in account.
 
Outlook - Stable
­
 
Other Factors affecting Rating
­None. 
 

Particulars Unit FY 24 (Actual) FY 23 (Actual)
Operating Income Rs. Cr. 7085.31 8873.59
PAT Rs. Cr. (423.72) (1512.95)
PAT Margin (%) (5.98) (17.05)
Total Debt/Tangible Net Worth Times (0.22) (0.20)
PBDIT/Interest Times 1.71 0.04
Status of non-cooperation with previous CRA (if applicable)
­Not Applicable. 
 
Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)
Not applicable
Any Other Information
­None. 
 
Applicable Criteria
• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Service Sector: https://www.acuite.in/view-rating-criteria-50.htm
Note on complexity levels of the rated instrument

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
30 Oct 2024 Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 310.50 ACUITE A4 (Upgraded from ACUITE D)
Bank Guarantee (BLR) Short Term 270.78 ACUITE A4 (Upgraded from ACUITE D)
Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE B+ | Stable (Upgraded from ACUITE C)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE B+ | Stable (Upgraded from ACUITE C)
Term Loan Long Term 20.00 ACUITE B+ | Stable (Upgraded from ACUITE C)
Term Loan Long Term 127.50 ACUITE B+ | Stable (Upgraded from ACUITE D)
Term Loan Long Term 60.00 ACUITE B+ | Stable (Upgraded from ACUITE C)
Term Loan Long Term 150.98 ACUITE B+ | Stable (Upgraded from ACUITE D)
14 Mar 2024 Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Term Loan Long Term 60.00 ACUITE C (Downgraded from ACUITE B | Stable)
Term Loan Long Term 20.00 ACUITE C (Downgraded from ACUITE B | Stable)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE C (Downgraded from ACUITE B | Stable)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE C (Downgraded from ACUITE B | Stable)
Term Loan Long Term 127.50 ACUITE D (Downgraded from ACUITE B | Stable)
Term Loan Long Term 150.98 ACUITE D (Downgraded from ACUITE B | Stable)
Bank Guarantee (BLR) Short Term 270.78 ACUITE D (Downgraded from ACUITE A4)
Bank Guarantee (BLR) Short Term 310.50 ACUITE D (Downgraded from ACUITE A4)
21 Dec 2023 Bank Guarantee (BLR) Short Term 310.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 270.78 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Term Loan Long Term 20.00 ACUITE B | Stable (Reaffirmed)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 127.50 ACUITE B | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 60.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 150.98 ACUITE B | Stable (Reaffirmed)
04 Oct 2023 Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 270.78 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 310.50 ACUITE A4 (Reaffirmed)
Term Loan Long Term 20.00 ACUITE B | Stable (Reaffirmed)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 127.50 ACUITE B | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 60.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 150.98 ACUITE B | Stable (Reaffirmed)
27 Feb 2023 Bank Guarantee (BLR) Short Term 310.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 270.78 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Term Loan Long Term 20.00 ACUITE B | Stable (Reaffirmed)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 127.50 ACUITE B | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 60.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 150.98 ACUITE B | Stable (Reaffirmed)
04 Jan 2023 Bank Guarantee (BLR) Short Term 310.50 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 59.70 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 270.78 ACUITE A4 (Reaffirmed)
Bank Guarantee (BLR) Short Term 18.50 ACUITE A4 (Reaffirmed)
Term Loan Long Term 20.00 ACUITE B | Stable (Reaffirmed)
Working Capital Demand Loan (WCDL) Long Term 80.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 127.50 ACUITE B | Stable (Reaffirmed)
Proposed Long Term Bank Facility Long Term 352.04 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 60.00 ACUITE B | Stable (Reaffirmed)
Term Loan Long Term 150.98 ACUITE B | Stable (Reaffirmed)
03 Aug 2022 PC/PCFC Short Term 150.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
PC/PCFC Short Term 173.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
Bank Guarantee (BLR) Short Term 450.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
Bank Guarantee (BLR) Short Term 192.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
Bank Guarantee (BLR) Short Term 100.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
Bank Guarantee (BLR) Short Term 100.00 ACUITE A4 (Reaffirmed & Issuer not co-operating*)
Term Loan Long Term 50.00 ACUITE B (Reaffirmed & Issuer not co-operating*)
Working Capital Demand Loan (WCDL) Long Term 100.00 ACUITE B (Reaffirmed & Issuer not co-operating*)
Term Loan Long Term 127.50 ACUITE B (Reaffirmed & Issuer not co-operating*)
Proposed Long Term Bank Facility Long Term 7.50 ACUITE B (Reaffirmed & Issuer not co-operating*)
12 May 2022 PC/PCFC Short Term 150.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
PC/PCFC Short Term 173.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Bank Guarantee (BLR) Short Term 450.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Bank Guarantee (BLR) Short Term 192.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Bank Guarantee (BLR) Short Term 100.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Bank Guarantee (BLR) Short Term 100.00 ACUITE A4 (Downgraded & Issuer not co-operating* from ACUITE A4+)
Term Loan Long Term 50.00 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE BB- | Stable)
Working Capital Demand Loan (WCDL) Long Term 100.00 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE BB- | Stable)
Term Loan Long Term 127.50 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE BB- | Stable)
Proposed Long Term Bank Facility Long Term 7.50 ACUITE B (Downgraded & Issuer not co-operating* from ACUITE BB- | Stable)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
Yes Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 310.50 Simple ACUITE A4 | Reaffirmed
Indian Bank Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 59.70 Simple ACUITE A4 | Reaffirmed
Yes Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 270.78 Simple ACUITE A4 | Reaffirmed
ICICI Bank Ltd Not avl. / Not appl. Bank Guarantee (BLR) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 18.50 Simple ACUITE A4 | Reaffirmed
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 224.52 Simple ACUITE B+ | Stable | Reaffirmed
Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 07 Sep 2028 60.00 Simple ACUITE B+ | Stable | Reaffirmed
Yes Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 06 Oct 2028 150.98 Simple ACUITE B+ | Stable | Reaffirmed
Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 04 Feb 2029 127.52 Simple ACUITE B+ | Stable | Reaffirmed
Yes Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Jun 2027 127.50 Simple ACUITE B+ | Stable | Reaffirmed
IDFC First Bank Limited Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 07 Aug 2027 20.00 Simple ACUITE B+ | Stable | Reaffirmed
City Union Bank Ltd Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 80.00 Simple ACUITE B+ | Stable | Reaffirmed
*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)
­
Sr. No Name of the companies
1  SpiceJet Express & Logistics Private Limited
2  Spicejet Merchandise Private Limited
3 Spice Shuttle Private Limited
4  Spicetech System Private Limited
5  Spicejet Technic Private Limited
6 Spice Club Private Limited
7 Spice Ground Handelling Services Private Limited
8 SpiceJet Interactive Private Limited
9 AS Air Lease 41 (Ireland) Limited (with effect from 19 October 2023)
10 Canvin Real Estate Private Limited
11 Spicejet Limited
 

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