Major Investment in Akasa Air

A consortium led by Premji Invest and Claypond Capital, representing the family offices of Wipro founder Azim Premji and Manipal Group chief Ranjan Pai, is set to acquire a substantial minority stake in Akasa Air.

The budget carrier aims to raise $130-140 million through this transaction. An insider revealed, "The term sheet has been signed and the Premji Invest-Ranjan Pai consortium have invested just over $100 million but other existing investors are also participating in the round taking the total to around $130-140 million."

The Premji Invest-Ranjan Pai consortium entered into a term sheet with Akasa in early December, with the deal nearing completion.

A source involved in the negotiations stated, "The contours of the deal has been finalised and the company will soon move for regulatory approvals from the Competition Commission of India (CCI)." The exact percentage of stake to be acquired remains undisclosed.

Initially scheduled for completion in October, the deal discussions extended due to differences regarding Akasa's revenue forecasts.

Akasa operates using an asset-light structure, purchasing new aircraft at competitive prices from manufacturers, selling them to lessors at a profit, and then leasing them back for operations. This sale and leaseback arrangement provides essential operational funding in a competitive market.

Delays in Boeing 737 Max deliveries have affected Akasa's anticipated income from aircraft sale and leaseback arrangements over the next five-year period.

The airline plans to utilise the new funding for expansion and aircraft pre-delivery payments. This investment will reduce the shareholding percentages of the Jhunjhunwala family and the Dube brothers - Vinay, Sanjay, and Niraj - who collectively hold approximately 67% of the airline.

The Jhunjhunwala family trusts, currently holding about 38% stake, will maintain their position as the largest shareholder in Akasa.