Akasa Air raises funds from Azim Premji, Ranjan Pai family offices
Akasa Air said late Indian billionaire Rakesh Jhunjhunwala’s family would also pour additional capital into the airline
NEW DELHI: India’s youngest airline, Akasa Air, said on Thursday that it has signed agreements with investors to raise fresh capital. The airline said that a group of prominent Indian investors, including Premji Invest (the investment arm of Azim Premji), Claypond Capital (Dr. Ranjan Pai’s investment office), and funds managed by 360 ONE Asset, an asset management firm, have signed agreements to invest in Akasa Air.
The airline said the family of late billionaire Rakesh Jhunjhunwala has committed additional capital to support the airline. Jhunjhunwala’s investment in August 2022 played a key role in starting the airline.
“These agreements are pending regulatory approval,” the airline said.
Akasa Air has a market share of 4.6%, next to IndiGo and the Air India group that together control nearly 90% of India’s domestic aviation market.
Vinay Dube, founder and the airline’s chief executive officer said these were not just financial transactions but an investment in the airline’s vision and commitment.
“We are thankful to our marquee investors for placing their confidence in Akasa Air and its leadership, and to the Jhunjhunwala family for their unwavering faith in the Akasian dream. These investment agreements will empower us to build on the future that every Akasian has envisioned—one that’s bright for each of us as well as for all of India, as we transform the way customers experience air travel,” he said
The airline also stated that these investments would support Akasa Air’s growth plans and strengthen its commitment to enhance customer experience..
This comes after Akasa Air faced challenges with the sale and leaseback (SLB) model, which helps airlines raise money. In an SLB arrangement, an airline sells one or more of its aircraft to a financial institution or leasing company. After the sale, the airline leases (pays rent) the same aircraft back from the buyer.
While SLB provides immediate cash flow, the risk comes when there are delays in aircraft delivery, as happened with Akasa due to Boeing’s inability to deliver the ordered (B737 MAX) aircraft on time.
Ankur Goel, chief financial officer (CFO) of Akasa Air, said the airline continues to be well-capitalised, and these investments would allow it to secure enduring, sustainable growth, “with a financial safeguard to weather any unexpected challenges, thus reinforcing our readiness for the future”.
