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India’s Newest Airline Is Quietly Prepping for an IPO: Can It Pull It Off?

  • Dec 17, 2025
  • Airline

The Indian aviation industry — long called one of the most competitive and capital-intensive markets in the world — may soon add another name to its list of public companies. Akasa Air, the youngest major airline in the country, is quietly preparing for an initial public offering (IPO) in the coming years. But as the carrier charts its path to the public markets, questions remain: Is the timing right? Can Akasa replicate the explosive growth of market leader IndiGo? And will investors be willing to back a pre-profit airline in one of the toughest sectors to monetize?

1. A Brief Origin Story: How Akasa Air Took Flight

Akasa Air is a low-cost carrier headquartered in Mumbai, founded in 2021 by aviation veterans and backed by investors including the late billionaire Rakesh Jhunjhunwala. 

The key figures behind the airline include:

  • Vinay Dube, Founder & CEO, with decades of experience at legacy carriers such as Jet Airways and Go First.

  • Aditya Ghosh, co-founder and former head of IndiGo, bringing institutional knowledge of India’s dominant low-cost model.

  • Rakesh Jhunjhunwala, the famed investor often dubbed India’s Buffett who provided early capital and lent credibility to the venture.

Akasa launched operations in August 2022, with its first flight from Mumbai to Ahmedabad. From the outset, it adopted a low-cost, customer-centric model, focusing on dense domestic routes with an all-Boeing 737 MAX fleet. 

Within a few years, Akasa expanded rapidly — growing to a fleet of 30 aircraft and flying to more than two dozen destinations across India and certain international gateways. 

This fast growth placed Akasa among India’s top three domestic airlines, capturing around 5%+ market share in a space dominated by giants like IndiGo and Tata Group-led Air India. 

2. The Indian Aviation Landscape: A Tough Market for New Entrants

Understanding Akasa’s IPO ambitions requires context. India’s aviation market has historically been challenging for new airlines. Multiple carriers — including Kingfisher Airlines, Jet Airways, and Go First — collapsed in past decades due to operational issues, debt burdens, and fierce competition.

At the same time, India’s aviation demand has grown strong post-pandemic, driven by:

  • A growing middle class with increasing propensity to fly.
  • Domestic tourism boom and business travel rebound.
  • Broad network connectivity supported by government schemes like UDAN.

3. Strategic Investment and Funding: Fueling Growth Before IPO

Akasa’s path to profitability and eventually public markets depends heavily on funding. In August 2025, the airline completed a strategic investment round worth approximately $125 million (about ₹1,200 crore). 

Key investors included:

  • Premji Invest, the private investment arm of Azim Premji.
  • 360 ONE Asset, a leading asset management firm.
  • Claypond Capital, associated with the Manipal Group.
  • The Jhunjhunwala family, who deepened their stakes.

This infusion was designed not just as financing but as a signal of confidence in Akasa’s long-term vision, supporting fleet expansion, customer experience investments, and operational scale. 

These funding milestones are critical because airlines tend to bleed cash before reaching EBITDA profitability — the key metric investors watch when deciding if an airline is investment-ready. However, according to The Economic Times, Akasa is not expected to turn EBITDA-positive in the near term, making the road to an IPO more protracted and proving that substantial groundwork remains.

4. The Financial Picture: Losses, Cash Flow, and Break-Even Challenges

Like most young airlines, Akasa has operated at a loss in its early years. High fixed costs, including aircraft leasing, personnel, fuel, airport charges, and maintenance, combined with large capital expenditure for rapid fleet growth, have kept margins under pressure.

Yet, industry reporting suggests that Akasa is already cash-positive on an operating level, a rare achievement for startups in this sector. 

Even so, analysts argue that the journey to consistent EBITDA profitability — and certainly net profitability — could take two to five years or longer. This timeline directly influences IPO timing, as public markets typically demand at least near-term profit visibility, if not actual profitability. 

As one equity strategist noted, airlines that remain undercapitalized or fail to deliver disciplined growth often struggle when market conditions tighten. Akasa’s strategy of securing capital ahead of need aims to mitigate this risk. 

5. IPO Prospects: A Plunge Into Public Markets?

Akasa plans to list in a few years, but market observers caution that it still has “substantial work left” to reach a valuation comparable to competitors like IndiGo. 

Industry discussions place a reasonable IPO window between 2027–2030, contingent on profitability, fleet scaling, and financial discipline.

With India’s aviation sector projected to become one of the world’s largest by passenger volume by the end of this decade, an Akasa listing could be attractive to investors seeking exposure to this secular growth story — particularly in the low-cost segment. However, timing and valuation will depend heavily on:

  • EBITDA profitability growth.
  • Fleet expansion and efficiency.
  • Competitive pressure from larger airlines.
  • Macroeconomic conditions influencing air travel demand.

6. Competitive Dynamics: IndiGo and Market Positioning

One of the largest benchmarks for Akasa is IndiGo, India’s largest airline and an IPO success story known for strong financials and operational discipline. 

IndiGo grew its valuation and profitability over many years before going public, setting a tough precedent for airlines in this space. To approach similar valuation multiples, Akasa will need not just robust growth but consistent profitability – a high bar in aviation.

Air India – now controlled by the Tata Group also remains a dominant competitor, with deep pockets and extensive global reach. SpiceJet and other regional carriers are vying for smaller market shares, making the competitive field even more complex.

7. Operational Execution: The Backbone of Success

An airline’s ultimate success is grounded in operational reliability — punctuality, route optimization, fleet utilization, and customer satisfaction. Akasa’s rapid fleet growth is impressive, but these gains need to translate into consistent service performance and reliability, especially as international routes expand. 

In addition, workforce constraints (such as pilot staffing) and Boeing 737 supply chain dynamics are external variables that can affect performance, as seen with delays and grounding issues worldwide.

Second, customer loyalty and brand reputation drive repeat passengers and ancillary revenues — areas where larger airlines have an edge due to scale and established networks.

8. Strategic Implications for Investors

If Akasa successfully lists at a premium valuation, it would offer investors:

  • A play on India’s fastest growing aviation market.
  • Exposure to the low-cost carrier segment, which generally delivers higher frequency and volume.
  • Opportunity to invest in a home-grown airline that has scaled quickly despite adverse conditions.

However, risks remain:

  • Continued losses before break-even.
  • Capital intensity and cost fluctuations (fuel, currency, leasing rates).
  • Competitive responses from incumbents.
  • Regulatory scrutiny and macro headwinds.

9. The Broader Impacts: India’s Aviation Ecosystem

A successful IPO from Akasa would have wider implications for India’s aviation ecosystem. It could:

  • Encourage greater capital flow into aviation, a sector historically starved for patient long-term funding.
  • Validate India’s low-cost aviation model as a sustainable, investable category.
  • Create a benchmark for future airline IPOs, potentially from regional carriers or cargo operators.

10. Conclusion: Can Akasa Pull It Off?

Akasa Air’s journey toward an IPO is ambitious and emblematic of India’s broader economic rise. The airline has cut an impressive growth arc over just a few years, secured strategic capital, and positioned itself as a credible third force in domestic aviation. 

Yet, reaching public markets will require continued operational execution, financial improvement, and clear profitability milestones. Investors will watch closely as Akasa demonstrates discipline in scaling, cost management, and competitive positioning.

If executed well, Akasa’s IPO could not just be a milestone for the airline but also for Indian aviation — paving the way for newer entrants, more robust market participation, and deeper engagement from global capital markets.

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