AirAsia India (I5, Chennai) shareholders Tata Sons and AirAsia Group have agreed to inject INR3 billion rupees (USD40 million) into the low-cost carrier through optionally convertible debentures as talks progress over ownership changes, The Economic Times has reported.

While AirAsia Group has never confirmed these talks, it is reportedly open to selling its 49% stake in the Indian venture to Tata Sons. Given the slump in the carrier's financial situation, already precarious before the pandemic, the Malaysian group has lowered its expected price to just USD50 million.

The LCC reportedly needs further recapitalisation but AirAsia Group, itself in a tough financial predicament, is unable to bankroll the Indian unit any more.

Tata Sons, one of India's largest multi-industry conglomerates, is eager to conclude talks about the future of AirAsia India as soon as possible, before the August 31 deadline for bids in the ongoing privatisation of Air India (AI, Mumbai Int'l), Business Standard added. Tata Sons is the frontrunner for the acquisition of the flag carrier but would likely partner with financial investors, who, in turn, would prefer to have clarity about the future of Tata's other airlines in India.

AirAsia India currently operates thirty A320-200s, the ch-aviation fleets advanced module shows.

Tata Sons has also agreed with its joint venture partner Singapore Airlines Group to recapitalise full-service carrier Vistara (UK, Delhi Int'l). The two shareholders will together inject INR750 million (USD10 million) through fresh equity shares.