Pranav Kashyap | December 2, 2022

Stock market analysts stopped tracking SpiceJet as they did not have any clarity on its management

Credit rating agencies like CRISIL Ratings Ltd. and Acuité Ratings & Research Ltd. reported
SpiceJet is “not cooperating” as the airline failed to provide adequate financial information for its rating
review.

In addition, brokerage firms like HSBC Securities Ltd. and Centrum Broking Ltd. stopped tracking the
airline in the first week of October 2022.

“CRISIL Ratings sent repeated reminders for payment of fees towards the routine credit rating review through letters and emails, apart from telephonic communication,” said a CRISIL report from June 2022.

Before CRISIL, Acuite had requested SpiceJet for information on new loans to survey and review the
company’s rating. The airline failed to submit the data before the report was published in August 2022.
SpiceJet has also failed to submit its ‘No Default Statement’ (NDS) to Acuite. The NDS clarifies that the
company has not defaulted on any loan since February 2022. Non-cooperation by the airline, along with
unwillingness to provide information, could be a sign of potential deterioration in its overall credit
quality, the Acuite report said.

Such instances are tagged as “Issuer Not-Cooperating (INC)” and the company’s ratings are usually “downgraded by multiple notches and revised to non-investment grade,” Acuite Ratings said in an email to the Bottomline.

The Securities and Exchange Board of India (SEBI) declined to comment on company specific issues. 

SpiceJet last released its annual report in 2020. It has a net debt of more than ₹1,400 crores and it has
reported losses for 12 consecutive quarters. The airline is struggling to raise new funds as lenders are
skeptical about the airlines’ survival in the market. The airline’s stock closed at ₹39.3, the lowest in two
years. Goldman Sachs stopped tracking the firm in 2021.

SpiceJet’s non-cooperation has also caused brokerage firms like Centrum Broking, HDFC Research,
HSBC Securities and ICICI Securities to stop tracking the airline.

“We don’t see value in the company and the management has been unresponsive,” said a senior analyst at
Centrum Broking. “We have no idea what’s going on with the management or the company.”

“There is no transparency” and a high level of financial uncertainty, said an analyst with a Hong Kong-
based brokerage firm. There are irregularities in SpiceJet results and insufficient data, he added.