InterGlobe Aviation Ltd (IndiGo) shares climbed 4 per cent in Wednesday's trade after the government announced an Emergency Credit Line Guarantee Scheme (ECLGS), targeting total additional credit flow of Rs 2,55,000 crore, including Rs 5,000 crore for airlines.

The scheme will offer credit guarantee coverage through National Credit Guarantee Trustee Company to member lending institutions (MLIs) for the amount in default under the additional credit facility. This will be done to help eligible borrowers tide over any short-term liquidity mismatches in view of West Asia crisis. They included scheduled passenger airlines having outstanding credit facilities, as of March 31, 2026, provided their accounts are standard.

Following the announcement, IndiGo shares rose 3.57 per cent to hit a high of Rs 4,391.30 on BSE. The stock is down 23 per cent in the past six months.  

For airlines, the guarantee coverage is up to 90 per cent and the quantum of support -- total amount of additional credit a borrower can receive under a scheme, is up to 100 per cent. It is capped at Rs 1,500 crore per borrower, subject to satisfying certain specific conditions. As far as tenor of loan is concerned, it would be seven years from the date of first disbursement, including a moratorium of two years.

This comes after FIA in a communication to the Ministry of Civil Aviation (MoCA) on April 26 raised concerns over operational challenges faced by domestic carriers due to rising aviation fuel prices, suggesting they were on the verge of stopping operations or grounding aircrafts, amidst unprecedented surge in the ATF (aviation turbine fuel) prices.

A recent media report had raised hopes the government will provide a sovereign guarantee for loans up to Rs 1,000 crore to each airline. Airlines can also borrow an additional Rs 500 crore if promoters or owners invest an equivalent amount in the company, the report had suggested.

The IndiGo stock, meanwhile, also gained as crude oil prices fell after the US President Donald Trump paused “Project Freedom” operation, citing progress towards an agreement with Iran.

The ECLGS is seen help businesses maintaining their operations, protect jobs, and sustain supply chains. "The proposed credit guarantee scheme is a major step to help businesses, particularly MSMEs and airline sector, to ensure their additional working capital needs, are catered by the Banks & FIs. By providing timely liquidity, the scheme will sustain the businesses and prevent job losses. It will also promote uninterrupted domestic production and maintain the resilience of the ecosystem," the press release read.