Akasa Air planning to issue new shares and raise $75 - $100 million: Report

Akasa Air is planning to raise $75-$100 million by offering new shares, reported The Economic Times. As per the report, the funds raised would be used to make pre-delivery payment for aircraft.

The airline that is backed by late billionaire Rakesh Jhunjhunwala has ordered 72 Boeing 737 Max out of which 19 have been delivered. The capital infusion is based on a $650 million valuation for the airline and the company has reportedly approached potential investors including PE firms and high net-worth individuals for the fundraising.

Existing stakeholder PAR Capital Management that has about 6% stakes in the airline is likely to buy some fresh shares. Currently, the Jhunjhunwala family holds approximately 46% of the shares through a trust. This fundraising plan would lead to dilution of shares held by the family. However, The Economic Times quoted a source and said that the majority of the shares will continue to stay with the Jhunjhunwalas even after the fundraising.

Meanwhile, the report also mentioned that, the family has a right of first refusal on any equity fundraising that Akasa plans.

Jhunjhunwala family has invested $50 million in the airline company. Along with this, the aircraft sale and leaseback gains gave Akasa $300-$350 million that enabled its successful launch. Meanwhile, brokerage firm ICICI securities has said that the outlook for airlines remained strong due to healthy growth in traffic, declining jet fuel prices and ticking ticket values.