Premji Invest, Claypond Capital to Invest $125 Million in Akasa Air: Reports

Wipro’s Azim Premji and Ranjan Pai’s Family Office, which includes Premji Invest and Claypond Capital, are negotiating to acquire a significant stake in Akasa Air, an airline company, The proposed investment of approximately $125 million (over Rs 1,000 crore) is aimed at supporting the airline’s expansion and financing pre-delivery aircraft payments. Advisory firm Alvarez & Marshall has been appointed to conduct due diligence on the deal.

The investment aligns with the vision of the late investor Rakesh Jhunjhunwala, who was instrumental in establishing Akasa Air. Currently, the Jhunjhunwala family holds the largest stake in the airline, with a 40% share, and will remain the largest shareholder even after the new investment.

According to a report by the Times of India, discussions are in progess, though the finalisation of the deal may take some time. Despite this, CEO Vinay Dube assured that Akasa Air would remain well-capitalised, stating that the cash they had was more than the initial investment. We are committed to remaining well-capitalised and to operating Akasa Air for the long term, he asserted.

Both Premji Invest and Claypond Capital, as well as Alvarez & Marshall, declined to comment further on the investment.

Investors are optimistic about the future of the airline sector amid intense competition between IndiGo and Air India. With GoFirst’s bankruptcy and SpiceJet’s financial difficulties reducing the sector’s major players, Akasa Air’s entry is seen as a promising development. SpiceJet’s fleet has dwindled from 98 aircraft before the COVID-19 pandemic to just 22.

Since its launch in August 2021, Akasa Air has rapidly expanded its fleet, adding 24 aircraft – a record pace for any new airline in the country. The airline initially ordered 76 Boeing 737 Max aircraft, followed by an additional 150 orders in January. However, production delays and increased regulatory scrutiny have impacted these plans.

Despite reporting a loss of Rs 744 crore in its first year and projected losses exceeding Rs 1,600 crore for the current financial year, Dube emphasised that such losses are part of the investment in building a strong foundation for the airline. Initial costs are part of the investment. We are investing in people, safety, training, and technology, and our initial investment is still secure, he said.