VCCircle

Who said the aviation business is not promising? Not in India at least, even though most of the market players are losing money. Investors are queueing up to invest in budget airline SpiceJet Ltd. The company's board has decided to issue shares on a preferential basis to investors to the tune of $80 million. Apparently the airline has got investment proposals worth $118.5 million from the investors. The potential investors include the Tata Group, private equity funds Texas Pacific Group Ventures, Istithmar PJSC and Goldman Sachs.

According to a report, Tata group firm Ewart Investments has offered to invest $16 million and Tata Investment Corp. Ltd $1.2 million (about 7.5 per cent . Texas Pacific has offered $30 million, Istithmar $25 million and Goldman Sachs $5 million. The shares have been placed at Rs 51.40 a share.

Dubai-based Istithmar currently holds 10 percent of SpiceJet.

This is interesting. Earlier, SpiceJet was planning to raise only $60 million through a plain vanilla equity sale. With the current interest, the airline upped its fund raising to $80 million. Spicejet has already raised money twice -- through a $80 million overseas convertible bond issue and a $12.5 million stake sale to Istithmar - since it began operations in May 2005, says Reuters.

SpiceJet had revenues of Rs 453 crore ($100 million) in the business year ending May 2006.