IndiGo's parent company InterGlobe Aviation on Monday said it will raise up to Rs 4,000 crore through a qualified institutional placement (QIP). The aviation sector has been hit hard due to travel restrictions amid the coronavirus pandemic. Consequently, IndiGo has cut salaries of senior employees and fired 10 per cent of its workforce during the last few weeks.
InterGlobe Aviation informed the BSE that its board of directors has approved "the raising of funds for an aggregate amount of not exceeding Rs 4,000 crores through an issue of equity shares by way of qualified institutional placement."
The company had on July 29 announced a massive loss of Rs 2,844 crore for the quarter ended June 30. In the corresponding period a year ago, it had posted a net profit of Rs 1,203 crore.
IndiGo on July 27 said it is implementing "deeper" pay cuts of up to 35 per cent for its senior employees in order to reduce its cash outflow amid the coronavirus pandemic.
From May onwards, IndiGo had implemented pay cuts of up to 25 per cent for its senior employees.
The deeper pay cuts came after the airline's announcement on July 20 that it would lay off 10 per cent of its workforce.
Scheduled international flights have been suspended in India since March 23 due to the coronavirus-triggered lockdown.
However, India has recently signed bilateral 'air bubble' arrangements with countries like the US, Germany and France that allows airlines of each country to operate international flights under certain restrictions.
Domestic flights resumed in India after a gap of two months on May 25.
Occupancy rate in Indian domestic flights has been around just 50-60 per cent since May 25.
All airlines in India have taken cost-cutting measures such as pay cuts, leave without pay and firings of employees in order to conserve cash in the aftermath of the COVID-19 crisis.