Ace investor Rakesh Jhunjhunwala is planning to invest up to $35 million (Rs 260.7 crore) in a new low-fare airline venture. The aviation venture is led by seasoned professional Vinay Dube, CEO of Jet Airways.
Dube is reportedly leading initial talks with Jhunjhunwala and a foreign investor for the new aviation venture. Jhunjhunwala may hold up to 40 percent stake in the new airline, according to a report in The Economic Times.
'Akasa' is the tentative name of the airline which is awaiting a no-objection certificate from the Ministry of Civil Aviation.
"The aviation ministry's NOC is just the first approval. For further applications, the team needs to draw up a firm business plan for which it needs funds. Everything depends on when and how much money they can raise. The aim is to start the airline by the middle of next year," an industry source told ET .
The aviation sector has seen record losses in over a year hit by second wave of coronavirus infection with a third wave expected within two months.
Jhunjhunwala has made small investments in the aviation sector.
The big bull owned over one percent in SpiceJet and one percent in Jet Airways which was shut down in 2019. Amid the ongoing slowdown in the Indian economy, Jhunjhunwala has reimposed his faith in Indian markets saying that India's bull market will continue and the inflation in India is transitory.
In an interview with CNBC-TV18, Jhunjhunwala said he expects the stock market rally to continue amid the ongoing correction. The ace investor advised investors not to be swayed by small corrections in the equity market. Jhunjhunwala also said inflation in the economy was temporary and the market rally won't be affected by rise in prices in the economy.
"Investors should not be fearful of the market as a whole merely because of small corrections," Jhunjhunwala said . Comparing the ongoing and the 2004-2008 bull market, Jhunjhunwala said he has a feeling that the current rally will last for decades.
Talking about the threat of coronavirus on market, Jhunjhunwala said he does not think there will be a third wave of COVID-19.
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