While there have been concerns about the future of AirAsia India, Tata Sons is reportedly planning to gradually increase its stake to over 76% in the beleaguered airline by 2020-21. AirAsia India is a joint venture between AirAsia Berhad and Tata Sons, where the former owns 49% and the latter 51%.  

“For the time being, AirAsia Berhad will continue to hold a minority stake, but it is all but certain that it will be converted into a Tata airline,” a person aware of the process told Business Standard.

It had earlier been reported that the Tata group may provide $50 million in emergency funding to the airline to keep it afloat. This fund infusion could be through a mix of debt and equity, which may see the Tatas increase their stake. 

“The company will hold a rights issue before December 31. As AirAsia Berhad will not participate in the rights issue, Tata Sons will convert an equivalent portion of its outstanding OCD into equity,” the person told the business daily.

The Tatas also have a stake in the Tata SIA Airlines Limited, which operates as Vistara. Vistara is a joint venture between the Tatas and Singapore Airlines. 

In addition to this, it was also reported that the Tatas may also be bidding for Air India and was reportedly in talks with Singapore Airlines to bid together for the airline. According to reports, its joint venture with Singapore Airlines has a non-compete clause. 

This potential move of the Tatas to raise its stake in AirAsia comes after a statement by President (Airlines) of the AirAsia Group, Bo Lingam, saying that the Indian business, along with the business in Japan, is draining cash, causing the group financial stress. At the time, he said that the group was reviewing its investment in India. 

AirAsia has been hinted at an India exit, and reportedly earlier reached out to ask the Tatas to buy out its stake.