Wipro’s Azim Premji and Manipal Group’s Ranjan Pai are now also planning to invest in late Rakesh Jhunjhunwala’s Akasa Air. Azim Premji’s Premji Invest and Claypond Capital are going to invest in it. Both the companies are in talks to invest around $125 million for a significant minority stake in Akasa Air respectively.
According to a person familiar with the deal, Premji Invest and Claypond are keen to invest in well-managed, consumer-oriented startups that are close to profitability and have a large market. The funds raised will be used for further expansion and to pay for aircraft before they are delivered, reports Economic Times. The investment will also result in dilution of the shareholding of the Jhunjhunwala family and co-founder and CEO Vinay Dubey, who together hold over 65% stake in the company.
However, the Jhunjhunwala family, which currently holds about 40% stake, will continue to be the largest shareholder, a person familiar with the details told the financial daily. “The process is still very much in the works with discussions moving ahead steadily, although it may still take some time to finalise and stabilise the investment,” said a person familiar with the process.
CEO Dube declined to comment on potential investments, but stressed the company’s commitment to remain well capitalized, saying, “The cash we have is more than the initial investment. We have committed to remain well capitalized — we are capitalizing today and will continue to do so as we build Akasa Air for the long term.”
The airline’s prospects are also exciting investors, as the industry is fast becoming a two-player race led by IndiGo and Air India, given the bankruptcy of GoFirst and the financial difficulties of SpiceJet, which has seen the number of aircraft in its operating fleet fall from 98 to 22.
Akasa Air, which began operations in August 2021, took advantage of reduced aircraft lease costs due to the pandemic and the immediate availability of pilots and cabin crew to expand its fleet by a record 24 aircraft, the fastest by any airline since India liberalised aviation in the early 1990s.
