Tata Sons acquired Air India airlines in October 2021 at an enterprise value of $2.3 billion from the Government. It also acquired the Air India Express in January 2022.
Tata Sons Ltd, the holding company of the Tata group, plans to raise $4 billion to introduce fresh capital to Air India and refinance costly debts, per a media report. Tata aims to raise funds through a mix of equity and hybrid debt, refinancing a part of Air India’s debt and renovating the airline, entreating anonymity.

Tata Sons acquired the airlines in October 2022 at an enterprise value of $2.3 billion by Government. “The Tata group would soon initiate the task of hiring investment advisers, although the informal deliberations with a few foreign lenders and some private equity funds are already proceeding,” said LiveMint. “The debt refinancing portion will be relatively easier as lenders who come under Tata’s existing banking relationships would step in,” the other person informed Livemint. “The equity component of the transaction might take a bit longer; the number of private equity funds investing in the airline business is relatively less,” the person added. Spokespeople for Tata Sons didn’t retort to an emailed inquiry by Mint on the fund-raising plan delivered on Friday.

Last month’s report stated that Tata Sons would soon create a provision for Rs 2,600 crore as accumulated losses for AirAsia India Airlines. Competition Commission of India (CCI) in June 2022, approved Tata Group-owned Air India’s proposal for the complete acquisition of equity share capital of low-cost carrier AirAsia India. Tata Sons, which majorly owns AirAsia India, holds a shareholding of 83.67%, and AirAsia Investment Ltd monitors the rest of the stake in the budget carrier.

As per the latest media report figures, Air India’s domestic market share shrank to 10.2% in January 2021, after Tata Sons completed the acquisition, from 11.6% in January 2020, based on data assembled by the Directorate General of Civil Aviation (DGCA). “The fund capitalisation is crucial for Air India’s operational efficiency to re-incur market share. From the funds introduced, the new aircraft and offer differentiated customer service initiatives, attracting passengers will be brought,” the first person says. As per the media report, Tata will be undertaking a refurbishment and expansion of Air India Ltd along with Air India Express. This would close orders for around 200 narrow-body A320 Neo Jets and wide-body aircraft. These will be delivered soon by the beginning of next fiscal.