New Delhi: New York-based Interups Inc has picked up a 49% stake in regional carrier TruJet Limited or Turbo Megha Airways, owned by Hyderabad-based MEIL Group, under the foreign direct investment (FDI) route.
TruJet, which currently operates flights to 21 destinations, including tier-2 cities with a fleet of seven ATR aircraft, will utilise the funds to expand its operations.
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“The funds raised through 49 percent FDI in the company, will be utilized to expand its operations pan India and explore the newer opportunities in the civil aviation sector,” MEIL’s group director K.V. Pradeep and Interups Inc’s chairman Palepu Lakshmi Prasad said in a joint statement without revealing the investment size.
“We will finalise the exact final amount at a later stage,” the statement added.
Destinations covered by the airline include Hyderabad, Mumbai, Aurangabad, Chennai, Goa, Bengaluru, Tirupati, Vijayawada, Kadapa, Rajahmundry, Ahmedabad, Porbandar, Jaisalmer, Nashik, Jalgaon, Cooch Behar, Buranpur, Tezu.
Interups Inc, which is eyeing stressed assets in India, had earlier shown an interest in bidding for national carrier Air India Limited. The company, however, chose not to submit an expression of interest (EoI). It was also in the running for Asian Colour Coated, which was eventually bagged by JSW Steel. Apart from these, it has shown interest in acquiring Delhi’s The Claridges and another hotel in Mahabalipuram.
Interups Inc’s Lakshmi Prasad had earlier told Mint that his company holds 27,635 qualified retirement asset accounts owned by US based non-residential Indians.
When contacted, Prasad said that confidentiality clauses prevented him from disclosing the investment volume. He, however, added that Interups Inc will remain a long-term investor in TruJet.
Interups Inc’s investment in TruJet comes at a time when Indian airlines, including regional carriers, have been adversely impacted by the covid-19 pandemic, which has resulted in a muted travel demand amid restrictions imposed by several states.
India’s air passenger traffic, which was adversely impacted by the pandemic, is expected to rebound in the next fiscal year though it will widely lag the levels seen in FY2016, credit rating agency Icra said in a recent statement.
“The investment will be a second lease of life for TruJet. But, the promoters will have to come up with a plan for expansion, profitability and growth for the airline,” said aviation consultant Mark Martin, chief executive of Martin Consulting LLC.
“The promoters will have to make some prudent decisions, and perhaps get a strong leadership team to start with,” Martin added.
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