Star Air owner plans to go public by 2030
What's the story
Sanjay Ghodawat Group, a diversified conglomerate with interests in aviation, real estate, textiles, retail, and FMCG among others, is eyeing a revenue of ₹15,000 crore by 2030. The company's aviation business alone is expected to contribute up to ₹6,000 crore during this period. The group operates the regional airline Star Air and has a current topline of ₹3,500 crore.
Investment plans
Star Air to invest ₹500cr in aviation business
Sanjay Ghodawat Group's Managing Director Shrenik Ghodawat has revealed that the company plans to invest ₹500 crore in its aviation business over the next two years. The group also intends to take its various businesses public within the next 2-5 years. Currently, Star Air's revenue from the aviation vertical was around ₹650 crore last year.
Market position
Star Air's growth strategy and competition
Ghodawat clarified that Star Air won't be switching to a budget carrier model from a regional airline permit. He said, "We are a low-cost carrier focusing on regional connectivity. And for the next five years, that is what it is going to remain." He further explained that 65% of their routes are under the regional air connectivity scheme Udan and the rest 35% are non-Udan.
Revenue sources
Other businesses to contribute significantly to topline
Apart from aviation, other businesses such as consumer and education verticals are expected to contribute ₹3,000 crore and ₹1,000 crore respectively. In the FMCG sector, the company plans to launch more products targeting Gen Z and millennials as well as Gen Alpha consumers. The group has already raised ₹150 crore of a ₹350 crore Series B funding round for Star Air from a consortium of investors including Micro labs Ltd and Deepak Agarwal of Bikaji Foods.
Funding strategy
Star Air plans to raise additional ₹200cr
Star Air plans to raise an additional ₹200 crore next year. The funds will be used for expanding the airline's fleet and route network, strengthening the Non-Scheduled Operator Permit operations, and enhancing its MRO (maintenance, repair and overhaul) capabilities. Ghodawat said they are now looking at private capital through private equity and family offices as well as institutional capital with an aim to take each of these businesses public eventually.