Akasa Air said Thursday it is raising fresh capital from PremjiInvest and Claypond Capital, the family offices of Wipro founder chairman Azim Premji and Manipal Hospitals chairman Ranjan Pai, respectively, as well as asset management company 360 ONE Asset.
The family of the late billionaire and stock market investor Rakesh Jhunjhunwala has also committed an additional capital infusion into Akasa Air, the company said. It didn’t disclose the amount the investors committed.
The fundraising comes at a time when Akasa is facing regulatory heat over certain lapses and violations of rules. The company is also deep into the red. In the year ended March 2024 – its first full year of operations – it recorded consolidated net revenue of Rs 3,070 crore, as per data from VCCEdge. However, net loss widened to Rs 1,670 crore from a loss of Rs 744 crore in FY23.
“Akasa Air continues to be well-capitalised, and these investments allow us to secure enduring, sustainable growth, with a financial safeguard to weather any unexpected challenges, thus reinforcing our readiness for the future," chief financial officer Ankur Goel said in a statement.
India’s aviation sector has recorded only a handful of private equity-style investments in the past many years. Homegrown PE firm WestBridge Capital owns a small stake in Interglobe Aviation Ltd, which operates IndiGo, while the aviation arm of Carlyle last year converted some of its debt into equity and wrote off some lease arrears. Fly91, a regional airline, counts PE-style investment firm Convergent Finance as a backer.
Akasa Air was launched in August 2022. It has flown over 15 million passengers since then. It connects 22 cities in India and five overseas. These include Mumbai, Bengaluru, Chennai and Delhi at home, and Doha (Qatar), Jeddah and Riyadh (Kingdom of Saudi Arabia), Abu Dhabi (the UAE), and Kuwait City (Kuwait).
The airline currently operates 27 Boeing 737 MAX aircraft and has placed an order for 226 of the same aircraft.
The airline has a market share of only 4.6% but is India’s third-largest carrier after IndiGo and Tata Group-owned Air India, which together control nearly 90% of the market.