Shares of SpiceJet hit the upper circuit limit of 5 percent at ₹12.70 per share on the NSE, while shares of InterGlobe Aviation, the parent company of IndiGo, rose nearly 4 percent to ₹4,376.7 per share following the government's announcement. According to reports from Moneycontrol, the buying interest was driven by the Union Cabinet's approval on Tuesday of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 with an outlay of ₹18,100 crore.
The scheme is expected to facilitate additional credit flow of ₹2.55 lakh crore, including ₹5,000 crore specifically for airlines. As reported by Moneycontrol, under the scheme, passenger airlines will be eligible for up to 100 percent of peak credit, capped at ₹1,500 crore, while other institutions can avail up to 20 percent of fund-based working capital, up to ₹100 crore. The loan tenor for airlines will be seven years from the date of first disbursement, including a moratorium of two years.
Civil Aviation Minister K Rammohan Naidu stated that the initiative would help airlines address short-term liquidity challenges and maintain operations amid global disruptions. According to his post on X, the scheme aims to provide strong financial backing to safeguard jobs, sustain connectivity, and ensure resilience across the aviation ecosystem. Information and Broadcasting Minister Ashwini Vaishnaw confirmed that the scheme has been brought to address stress in MSME and airline sectors due to the West Asia conflict that began in February.
The scheme will apply to all loans sanctioned from the date of issuance of guidelines by NCGTC up to March 31, 2027. As reported by Moneycontrol, the government emphasized that the scheme aims to help businesses manage challenges arising from the West Asia conflict, help businesses maintain operations, protect jobs, and sustain supply chains. For MSMEs and other borrowers, the tenor will be five years, including a one-year moratorium.
