IndiGo seeks 57% higher borrowing limit to fund fleet expansion

New Delhi/Mumbai: InterGlobe Aviation Ltd, which operates India’s largest airline IndiGo, is seeking shareholder approval to raise its borrowing limit by 57% to ₹110,000 crore, from the existing ₹70,000 crore, as the airline prepares to finance an aggressive fleet expansion.

The airline expects to exhaust its existing borrowing limit in FY27 and seeks an additional borrowing capacity of ₹40,000 crore, which it is likely to use by the first half of FY29, IndiGo said in the shareholder notice to its annual general meeting on Tuesday.

About 75% of the incremental borrowing capacity is expected to be used to finance aircraft through long-term finance leases, with the balance earmarked for capital expenditure and working capital.

The move comes as IndiGo works through one of the largest aircraft expansion programmes in global aviation. The airline had a fleet of 441 aircraft as of 31 March 2026, while its order book stood at about 900 aircraft, with deliveries spread through 2035. IndiGo is also targeting nearly 200 million passengers annually, around 3,000 daily departures and a fleet of more than 550 aircraft by 2030.

“In order to support the steady stream of planned aircraft deliveries through diversified sources of financing and working capital requirements in the coming years,” the company expects to utilize its existing borrowing limit during FY27, it said.

The airline had already received sanctioned credit facilities of about ₹66,150 crore by 31 March, equivalent to 95% of its existing borrowing limit. Of this, ₹46,190 crore had been utilized, including about ₹28,850 crore in finance lease liabilities, ₹1,810 crore in working capital borrowings and ₹15,540 crore in non-fund-based facilities.

“IndiGo is looking to have 40% of its fleet under owned and financed leases. That is why it is looking to raise borrowing limits and fund the aircraft additions,” said Gagan Dixit, senior vice president - oil and gas, and aviation, at brokerage firm Elara Securities.

“It is well capitalized and does not require borrowings for day-to-day operations,” he added.

IndiGo is not alone in seeking greater borrowing headroom as Indian airlines step up fleet expansion. Tata Group’s low-cost carrier Air India Express raised its borrowing limit by 25% to ₹17,500 crore, while Akasa Air more than tripled its borrowing limit to ₹3,950 crore.

Incidentally, the proposed borrowing limit comes at a time when IndiGo is facing a combination of higher costs, geopolitical disruptions and a significant management transition. Managing director Rahul Bhatia has highlighted these challenges in his address to shareholders in the annual report.

“Recent global developments have reinforced the interconnected nature of economies and highlighted the vulnerabilities that impact industries dependent on international trade, energy markets, and global mobility,” Bhatia told shareholders in the annual report.

“Fuel remains one of the largest cost components for any airline, and volatility in global energy markets continues to create significant operating uncertainty,” he said.

Bhatia also listed out the significant challenges for Indian aviation in FY26, which has been “adversely impacted by airspace closures since over a year”. Pakistan’s closure of its airspace to Indian airlines since April 2025 has led to airlines, including IndiGo and Air India, flying longer routes for westward travel to Europe and the Gulf, causing higher fuel burn and an increase in operating costs.

In parallel, Bhatia said, ongoing supply chain constraints are affecting aircraft production, engine availability, maintenance cycles, and component sourcing. This has put pressure on airlines’ global expansion plans.

“Foreign exchange volatility, particularly in emerging markets where capital costs are denominated in foreign currencies, remains an important consideration too,” he said, pointing out that macroeconomic factors have the potential to influence consumer confidence, business sentiment, and overall economic activity.

“As a rapidly growing economy deeply integrated into global markets, India too will inevitably experience the effects of these developments, which may in turn impact travel demand in the near or medium term,” Bhatia said.

InterGlobe Aviation’s annual report flags geopolitical tensions, oil price volatility and currency depreciation as key risks for FY27. These have been reflected in its annual financial performance, as the airline swung into a loss in FY26 of ₹2,394 crore, even as its revenue from operations increased about 5% year-on-year to ₹84,962 crore.

The airline is also navigating a leadership transition.

Co-founder and managing director Rahul Bhatia took over additional charge as interim chief executive in March as the airline saw the abrupt departure of then chief executive Pieter Elbers, following the carrier’s operational meltdown in December 2025. Elbers was paid a remuneration of ₹69.4 crore, up 62%, as per the company’s annual filings. Bhatia has not drawn any remuneration from the airline, as mentioned in the annual report.

Most recently, the airline redesignated CFO Gaurav Negi as adviser to the managing director, effective after business hours on Monday. Deputy CFO Kiran Thadimarri will take over as CFO and key managerial personnel from Tuesday, the company said in a stock exchange filing on Monday.

The transition is the latest in more than half a dozen senior leadership changes at IndiGo since Bhatia took over in March following the abrupt exit of former CEO Pieter Elbers. It also comes ahead of the arrival of new CEO William Walsh, who is expected to take charge no later than 3 August.