Akasa Air (QP, Mumbai International) is looking to raise up to USD400 million, in the process watering down the stake of its major existing shareholders, according to India's Mint outlet.
An unidentified source close to proceedings told the outlet that "the fundraising will be done in multiple tranches, with an increasing valuation of up to USD1 billion from around USD650 million now. The Jhunjhunwala family is unlikely to buy any additional shares in the planned fresh equity issuances, which may dilute their holding."
That family, whose now deceased patriarch Rakesh Jhunjhunwala founded Akasa in 2021, owns 45.97% of the airline. Other significant shareholders include CEO Vinay Dube with a 16.13% stake, Madhav Bhatkuly with 9.41%, Sanjay Dube and Niraj Dube each with 7.59%, and PAR Capital Ventures Llc with 6.37%.
Akasa Air flies to 16 destinations within India with its fleet of nineteen B737-8s and single B737-8-200. A spokesperson for Akasa said the airline had generated cash from day one, and the initial investments provided by the Jhunjhunwalas and others remained intact in the carrier's bank accounts. "As a young airline, we are proud that we are adding to the company reserves even in the first year of our operations," the spokesperson said.
Separately, just as Akasa has received approval from India's Ministry of Civil Aviation to operate international flights, it has experienced an exodus of pilots, with 43 leaving before their contracted employment periods expired, causing the airline to take them to court for contract breaches and cancel hundreds of flights. Reportedly, Akasa will cancel up to 700 flights across September if they cannot stem the tide of resignations. Last week, in an internal staff email, Akasa's CEO said he would give up market share to stabilise operations. However, Dube denied speculation Akasa would suspend all flights due to pilot shortages.
Directorate General of Civil Aviation (DGCA) rules stipulate that first officers must give employers six months notice and captains 12 months notice.
