IndiGo seeks 57% higher borrowing limit to fund fleet expansion

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

The airline expects to exhaust its existing borrowing limit in FY27 and is seeking additional borrowing capacity of Rs. ₹40,000 crore is likely to be utilized in the first half of FY29, IndiGo said in its shareholder notification for its annual general meeting on Tuesday.

Approximately 75% of the increased borrowing capacity is expected to be used for aircraft financing through long-term financial leasing, with the balance allocated for capital expenditures and working capital.

The move comes as IndiGo is working on one of the largest aircraft expansion programs in global aviation. The airline had a fleet of 441 aircraft as of March 31, 2026, with an order book of approximately 900 aircraft with deliveries spanning 2035. IndiGo is also targeting around 200 million passengers per year, around 3,000 departures per day and a fleet of more than 550 aircraft by 2030.

The company said it expects to use its existing borrowing limit through FY27 “to support a steady flow of planned aircraft deliveries through a variety of financing sources and working capital requirements in the coming years.”

The airline had already received approved credit facilities for approx. ₹66,150 crore as on March 31, which is 95% of the current borrowing limit. This, ₹Approximately 46,190 crore were used. ₹28,850 crore in financial lease liabilities, ₹1,810 crore in working capital borrowing and ₹15,540 crore in non-fund based facilities.

“IndiGo wants 40% of its fleet to be under owned and financed leases. Therefore, it is considering increasing borrowing limits and financing additional aircraft,” said Gagan Dixit, senior vice president of oil, gas and aviation at brokerage firm Elara Securities.

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

As Indian airlines accelerate fleet expansion, IndiGo is not alone in seeking more borrowing space. Tata Group’s low-cost airline Air India Express increases borrowing limit by 25% ₹17,500 crore, while Akasa Air more than tripled its borrowing limit ₹3,950 crore.

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

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

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

Bhatia also outlined the significant challenges faced by Indian aviation in FY26, which was “adversely affected by airspace closures for over a year”. Pakistan’s closure of its airspace to Indian airlines since April 2025 has led airlines including IndiGo and Air India to fly longer routes for westward travel to Europe and the Gulf, resulting in greater fuel consumption and an increase in operating costs.

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

Pointing out that macroeconomic factors have the potential to affect consumer confidence, business sentiment and general economic activity, he said, “Foreign currency volatility continues to be an important issue, especially in emerging markets where capital costs are determined in foreign currencies.”

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

InterGlobe Aviation’s annual report flags geopolitical tensions, oil price volatility and currency depreciation as key risks for FY27. These were also reflected in its annual financial performance, as the airline made a loss in the 26th year. ₹2,394 crore, although its revenue from operations increased by around 5% YoY. ₹84,962 crore.

The airline is also going through a leadership transition.

Co-founder and chief executive Rahul Bhatia took on the additional role of interim chief executive in March following the airline’s sudden departure of then chief executive Pieter Elbers, following the airline’s operational collapse in December 2025. ₹69.4 crore, up 62%, according to the company’s annual records. Bhatia did not receive any remuneration from the airline, as stated in the annual report.

Recently, the airline reappointed CFO Gaurav Negi as advisor to the general manager, effective after business hours on Monday. Deputy CFO Kiran Thadimarri will take over as CFO and key management personnel starting Tuesday, the company said in its filing with the stock exchange 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 sudden departure of former CEO Pieter Elbers. This also comes before the arrival of new CEO William Walsh, who is expected to take over on August 3 at the latest.