The funds raised will be used for pre-delivery payments of aircraft and to further expand the business (Image: X @Akasa Air)
An investment discussion is currently progressing between a consortium of Premji Invest, Claypond Capital (the family offices of Wipro’s Azim Premji) and Manipal Group’s Ranjan Pai to buy a minority stake for $125 million in Akasa Air, as per the reports. This consortium has appointed a consultancy firm Alvarez & Marsal to seek attention to the process giving due diligence to the task behind it.
Claypond Capital and Premji Invest focus on consumer-oriented startups that are close to profitability and have a significant market share. The funds raised will be used for pre-delivery payments of aircraft and to further expand the business. This investment may result in the dilution of the shareholding of the Jhunjhunwala family and that of co-founder and chief executive Vinay Dube, who collectively own over 65% stake in the company according to ET. However, the current holding of a 40% stake by the Jhunjhunwala family will be considered the largest shareholder, according to the reports.
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Earlier in August, Akasa Airline which owns a market share of 4.7% stated that the company will have to wait at least 2 years to generate revenue and turn profitable. Akasa Air’s chief financial officer Ankur Goel said that the company anticipate becoming profitable as it plans to add aggressive capacity extending to new destinations. In a Reuters interview, chief executive officer Vinay Dube said that the airline began its international flights in March and has ordered around 150 Boeing 737 MAX aircraft which are expected to be delivered by 2027.
Akasa Air is a brand of SNV Aviation Private Limited which is a low-cost Indian airline headquartered in Mumbai founded by Vinay Dube and Aditya Ghosh with investors holding a 46% stake in the airline that boarded its first flight service from Mumbai to Ahmedabad. However, it currently flies in the red, posting a ₹744-crore loss in FY23.
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