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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 1066.70 | ACUITE BB- | Stable | Upgraded | - |
| Bank Loan Ratings | 383.30 | - | ACUITE A4+ | Upgraded |
| Total Outstanding | 1450.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has upgraded its long-term rating to ‘ACUITE BB-’ (read as ACUITE double B minus) from ‘ACUITE B+’ (read as ACUITE B plus) and short term rating to 'ACUITE A4+' (read as ACUITE A four plus) from 'ACUITE A4' (read as ACUITE A four) on Rs. 1450.00 Cr. bank facilities of SpiceJet Limited. The outlook is 'Stable'.
Rationale for rating The upgrade in the rating reflects the significant new infusion of funds from key promoter in March 2025 into the airline which occurred after the QIP (Qualified Institutional Placement) in September 2024 providing additional liquidity cushion and which will be helping in improving overall operations. The rating also supported by improvement in scale of operations & profitability, unutilized funds of ~Rs. 300 Cr. from last fund raising round (QIP) as on 31st March 2025 and reduction in the aircrafts lease liabilities (operational creditors) settled through negotiations with the lessors. Acuite notes that the new order for fresh fleet has been given to increase the existing fleet size will benefit the airline in near to medium term. The timely delivery of these new aircrafts will be key monitorable. These strengths are balanced by the challenges of operating in a highly competitive and regulated industry, weak financial risk profile and susceptible to volatile fuel prices and foreign exchange risks. |
| About the Company |
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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.
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| About the Group |
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| Unsupported Rating |
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Not Applicable
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| 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.
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| 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. SpiceJet has given new order for increasing the capacity of existing fleet which is expected to benefit the company in the near to medium term. Acuité believes that the presence of diversified revenue stream and robust fleet will aid SpiceJet’s revenue profile over the medium term. Improvement in Scale of Operations & Profitability The net revenue of the group has declined by 24.83% and stood at Rs. 5,325.69 Cr. in FY 2025 as compared to Rs. 7,085.31 Cr. in FY 2024. The decline is mainly due to on the grounding of most of the fleet in first six months of FY 25 (before QIP). However, post QIP, the revenue from operations has improved quarter on quarter basis. SpiceJet booked revenue of Rs. 911.04 Cr. in Q2 improved to Rs. 1,237.04 Cr. in Q3 which further improved to Rs. 1,465.56 Cr. in Q4 FY 25. The same trend has been witnessed in EBIDTA & PAT levels quarter on quarter. Overall, the operational loss (EBITDA loss) improved & stood at Rs. 441.38 Cr. in FY 2025 against Rs. 638.35 Cr. in FY 2024. The improvement is mainly due to better absorption of fixed expenses. SpiceJet booked net profit of Rs. 61.93 Cr. in FY 25 against net loss of Rs. (423.72) Cr. in FY 2024. This is mainly due to waiver / reduction in the lessor liability after settlement. Acuite believes that going forward, the scale of operations & profitability will improve on account of infusion of additional funds as well as induction of new fleet size in near term to medium term. |
| Weaknesses |
| Weak Financial Risk Profile
The group’s financial risk profile is poor marked by negative tangible net worth of Rs. (2,983.47) Cr. in FY 2025 however improved from negative Rs. (6,628.18) Cr. in FY 2024. Although, net worth is negative, the improvement is on the account of infusion of funds through QIP, promoter and accretion of net profits into reserves. Further, the debt-equity ratio of the company stood at (0.30) times in FY25 against (0.17) times in FY24. The debt protection metrices (i.e. ISCR & DSCR) stood at 3.40 & 1.81 times in FY25 against 1.71 & 0.71 times in FY24 respectively. The TOL/TNW ratio stood at (2.86) times in FY25 against (1.76) times in FY24. Acuite believes that with going forward, financial risk profile will improve in medium term with steady accruals. 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. |
| ESG Factors Relevant for Rating |
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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 |
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| Liquidity Position |
| Adequate |
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The liquidity profile of the group is adequate marked by the unutilized balance amount of Rs. 300.46 Cr. from QIP proceeds available in their deposits as well as further infusion of funds from promoters to the extent of Rs. 294 Cr. in March 2025. SpiceJet generated adjusted net cash accrual of Rs. 706.72 Cr. in FY 25. However, it is mainly due to the non cash adjustment by waiving of lessor liability post setlement. The current year debt obligations are being paid out from funds infusion in last 18 months into the group. The group has the cash balance of Rs. 260.17 Cr. as on 31st March 2025. The current ratio of the group is 0.40 times for FY 25 against 0.29 times for FY 24. This is low due to unsettled lessor liability standing in their books. The issuer will utilize these additional proceeds to settle with lessors, ungrounding of fleet & induction of new fleet and general corporate purposes. Acuite believes that the group will be able to improve liquidity in near future with steady accruals on the account of induction new fresh fleet & ungrounding of existing fleet. |
| Outlook - Stable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 5325.69 | 7085.31 |
| PAT | Rs. Cr. | 61.93 | (423.72) |
| PAT Margin | (%) | 1.16 | (5.98) |
| Total Debt/Tangible Net Worth | Times | (0.30) | (0.17) |
| PBDIT/Interest | Times | 3.40 | 1.71 |
| Status of non-cooperation with previous CRA (if applicable) |
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Not Applicable
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| Any Other Information |
| None |
| Applicable Criteria |
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• 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 |
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||||||||||||||||
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