SpiceJet to raise 50 billion rupees, add 150 more planes

India's second-largest low fare airline SpiceJet Ltd seeks approval from shareholders to raise 50 billion rupees ($750 million) in loans as it plans to expand its fleet by adding more than 150 planes.

According to the Hindu Business Line, the low cost airline plans to raise R5,000 crore in loans by pledging its assets using various sources. The company ordered 42 Boeing 737 Max aircrafts for a price of $4.4 billion in March. SpiceJet CFO Kiran Koteshwar said July that they would put their biggest order ever by the end of the fiscal year, and would look for loans to pay for the airplanes.

Bloomberg News reported that SpiceJet is planning to buy some 100 narrow-body planes from Boeing Co. and Airbus Group SE. It will also order 50 regional jets from Bombardier Inc and other suppliers. The agreement for these deals may be finished by the end of this fiscal year.

SpiceJet also announced earlier this week that Gulf airlines is interested to buy a stake from the company. Its stock has increased 300 percent year-to-date in 2015, making it the best-performing airline stock in the world. On Friday trading in Mumbai, the company's shares rose 0.4 percent at 68.90 rupees.

The company is expecting India's domestic air travel market to go up 20 percent in the next decade, give and take two years. This will boost the company's profit even further.

In a report by Live Mint, SpiceJet said in a statement, "The company is well in the process of consolidating its position in this market. Pricing of air travel is now reflective of the underlying cost structure. With forecast capacity growth in the industry remaining below the demand growth, the current pricing is sustainable and can be improved gradually. This coupled with initiatives on cost reductions will make the company to remain profitable."

The company almost collapsed last year, but rebounded under a new management. Its former co-founder, Ajay Singh, who sold his stake in 2010, is now back in the company.