A consortium led by Wipro founder Azim Premji’s family office, Premji Invest, and Manipal Group’s Ranjan Pai’s family office, Claypond Capital, is poised to acquire a minority stake in Akasa Air, according to a report by The Economic Times. This investment forms part of the airline's ongoing $130 million to $140 million fundraising round, which is expected to provide a substantial boost to Akasa’s operations and long-term growth.
The consortium has committed over $100 million to the funding round, with additional contributions from other investors completing the funding. Reports suggest that the valuation of Akasa Air has been pegged at slightly under $350 million, which marks a significant rise from its valuation of $86 million in 2021, as noted by data from Tracxn. This marks a substantial increase in the airline’s worth, showcasing its promising trajectory in a highly competitive market. With the terms of the deal finalized, the next step involves obtaining regulatory approvals from the Competition Commission of India (CCI), which is expected to happen soon.
The Jhunjhunwala family estate, which currently holds a 38% stake in Akasa Air through various trusts, is also planning on increasing its investment in the airline. Despite the dilution of some of its shares due to the influx of new investors, the Jhunjhunwala family will remain the largest single shareholder in Akasa Air. Collectively, the Jhunjhunwala estate and the Dube family, which is headed by Akasa Air's founder and CEO Vinay Dube, will still hold around 67% of the airline post-deal.
The newly raised capital will primarily be used to accelerate Akasa Air’s growth strategy. This includes expanding its fleet and securing pre-delivery payments for additional aircraft, a crucial step as the airline aims to scale up its operations. The airline had previously signed a term sheet with the Premji-Pai consortium earlier this month, and the deal is expected to close shortly, further cementing the airline's financial and strategic positioning in the market.
This funding round not only reinforces Akasa Air’s market position but also signals growing confidence in the airline's business model and its long-term potential in India’s competitive aviation sector. With a clear focus on expanding its fleet, enhancing service offerings, and tapping into new routes, Akasa Air is well-positioned to capitalize on the increasing demand for air travel in India, a market that is expected to grow substantially over the coming years. Furthermore, this investment shows the continued interest of institutional investors in the Indian aviation sector, reflecting a belief in Akasa’s future success despite the challenges faced by the industry at large.
The involvement of prominent investors such as Premji Invest and Claypond Capital also brings a level of credibility and expertise to Akasa Air, offering valuable guidance and resources as the airline moves forward in its growth journey. In the coming months, the focus will likely shift to executing its expansion plans, with the airline working to improve its infrastructure, enhance customer experience, and grow its footprint in the fast-paced and ever-evolving aviation sector in India.
