Before his death, Jhunjhunwala & family became Akasa's biggest shareholders

Three trusts named after his twin sons and daughter now hold 27% stake in firm; combined family holding at 46%

Seven months before the launch of Akasa Air and the death of Rakesh Jhunjhunwala, the ‘Big Bull’ and his family became its largest shareholders after three trusts, in the names of his sons and daughter, bought shares in the company. With those transactions the family’s combined holding increased to around 46 per cent from 16 per cent earlier.

Two of the trusts, Aryaman Jhunjhunwala Discretionary Trust and Aryavir Jhunjhunwala Discretionary Trust, are named after his twin sons. The third one, Nishtha Jhunjhunwala Discretionary Trust, is named after his daughter.

According to filings with the Registrar of Companies, Jhunjhunwala’s wife Rekha injected Rs 78.74 crore on behalf of the trusts in SNV Aviation, the holding company of Akasa Air, this January. This fund injection came just weeks after an investment of Rs 87 crore in the name of these trusts in December 2021. This was the first time that the trusts in the names of Jhunjhunwala’s children were made shareholders in SNV aviation. The investments gave the three trusts a combined stake of 32 per cent in the airline.

There are several trustees of the three trusts that give money to the children at their own discretion. All the trusts are registered at the same address at Mumbai’s Nariman Point, which houses Jhunjhunwala’s investment company. Jhunjhunwala also invested through these trusts in Metro Brands, which went public last year. Rekha and Rajesh Jhunjhunwala held 9.6 per cent and 4.3 per cent stakes, respectively, in the airline.

Akasa did not respond to questions till the time of publication. In the wake of Jhunjhunwala’s demise, the airline’s CEO Vinay Dube on August 17 had said, “Thanks in no small part to Jhunjhunwala, for which we will always be grateful, Akasa Air is a well-capitalised airline with the financial means to induct 72 aircraft over the next five years. In fact, our financial platform is strong enough to allow Akasa to place an aircraft order in the next 18 months that will be significantly larger than our first. In simple terms, our growth is secure.” 

Clutch of investors

Around the time the trusts were made the largest shareholders, Rakesh Jhunjhunwala had brought a clutch of investors onboard Akasa Air. In January, Jhunjhunwala himself invested Rs 84 crore in the airline. Another Rs 90 crore was invested by others including two Boston-based investment firms. A former partner of one of these firms is presently on the board of directors of United Airlines.

Kartik Varma, the UK based co-founder of PropTiger, was also one of the investors onboarded by Jhunjhunwala at the time. Dubai-based investor Madhav Bhatkuly and former Reliance Capital chief investment strategist Madhusudan Kela were also among those who invested in Akasa Air. Jhunjhunwala, his wife and the three trusts have invested close to Rs 250 crore in Akasa.

Aditya Ghosh, the former chief executive officer of IndiGo, who teamed up with Jhunjhunwala and former Jet Airways CEO Vinay Dube to launch Akasa, was also allotted three million shares as part of the airline’s employee stock ownership plan (ESOP).

Ghosh, who serves as a non-executive director of Akasa, will get these shares in three tranches. The first will be given in 2023 and the other two before 2027.  Akasa’s chief information officer, commercial officer, vice-president of government affairs are some of the others who were given ESOPs last year.

Jhunjhunwala died on August 14, a week after the maiden flight of Akasa Air between Mumbai and Ahmedabad. The no-frills airline plans to induct 72 Boeing 737 MAX planes by 2030. In addition to connecting Mumbai and Ahmedabad, Akasa has started operations on the Kochi-Bengaluru and Mumbai-Bengaluru sectors.