Akasa Air (QP, Mumbai International) is hunting between USD75 million and USD100 million to fund aircraft acquisitions, according to multiple Indian media reports. The airline is said to have been meeting with private equity firms and ultra-high net worth individuals to raise the funds to help pay for the next instalment of B737-8-200s on order. The capital will be raised through issuing new shares.
Akasa Air commenced flying in 2022, and its nineteen B737-8s now fly to 19 domestic destinations and have reportedly snared a 5% market share. India's Jhunjhunwala family is behind the start-up, initially investing USD50 million. A family trust now holds a 46% interest in the airline that carries a USD650 million market valuation.
"Think of the airline as a startup and look at this as its next round of fundraising. The kind of ambitions the airline has, would money from the Jhunjhunwalas be enough to sustain them?" one person close to the talks told India's Economic Times. "The answer is no. Also, remember the Jhunjhunwalas are financial investors and not promoters, as is the case with several airline ventures in India. The trust is unlikely to participate in this round of funding, but even after the dilution, will retain a substantial stake."
In addition to the Jhunjhunwala family trust, other notable investors in Akasa Air include its CEO, aviation industry veteran Vinay Dube, who has a 16.13% shareholding, Madhav Bhatkuly (9.41%), Sanjay Dube (7.59%), Niraj Dube (7.59%), US-based private equity firm PAR Capital Ventures LLC (6.37%), Kartik Verma (1.93%), and Ninan Chacho (1.07%).
In November 2021, Akasa Air ordered seventy-two aircraft from Boeing, a combination of B737-8s and B737-8-200s. Over 50 aircraft from the order remain undelivered, and pre-delivery payment deadlines for the next batch is approaching. As recently reported in ch-aviation, Akasa expects to take delivery of its first B737-8-200 by the end of July, with another eight due for delivery by the end of March 2024. The airline expects to have all 72 aircraft delivered by mid-2027.
