Laxmi Prasad: Air India bidder who tried to buy everything under the sun

Buying Air India doesn’t seem to have been on Laxmi Prasad’s mind till January 30, 2020. On that day, Interups Inc, a New York-based firm owned by the NRI chartered accountant-turned-businessman engaged one of India’s top corporate lawyers, Zia Mody, to start the process of due diligence for buying Air India.
 

Almost a year down the line, Prasad’s firm, 70 per cent of whose equity is held by NRIs, is bidding for Air India in a consortium comprising several hundred employees of the national airline. Prasad is putting his financial muscle behind the employees’ resolve to run the airline. And in the process he’s hoping to outbid the Tata group — the other bidder for Air India. After all, he once had plans to buy a 49 per cent stake in AirAsia India, another airline partly owned by the Tatas.
 

By February, Interups had elaborate plans on how to fund its acquisition of Air India. It told regulators that 49 per cent of the money required to buy India’s national airline would come from his company, which manages customers’ retirement asset accounts, more than half of whom would be NRI customers. Another 26 per cent would come from “strategic investors and institutional clients”. All these investors whose money was being used to buy Air India would be given a stake in the airline if Interups wins the bid.
 

Since government rules required a domestic partner, Prasad’s company would float an infrastructure investment trust in India to comply with bidding rules. More importantly, plans were also made to appoint a company managed by Air India’s employees to run the airline. Interups’ present bid along with some of the airline’s employees seems to be playing according to script.
 

Ever since the Modi government started a second round of selling the airline in 2019 after failing to invite a single bid in its first attempt in 2018, Prasad’s firm has been eyeing quite a few businesses in India, none of which appears to have come to much.
 

In late 2019, his American company and three of its Indian affiliates in which Prasad is a director was aggressively pursuing real estate in India. According to regulatory filings, Prasad’s company had signed agreements for developing an integrated township on around 25 acres of land near the Chennai airport. Land was to be bought from Tamil Nadu business magnate Palani Periasamy’s Appu hotels, which also runs the Le Meridien hotel in the Chennai. Around the same time Interups Inc was exploring buying residential projects in Bengaluru and Chennai in addition to get into paddy cultivation and trading in Andhra Pradesh with an eye on 35,000 acres of cultivated land owned by various farmers. It also planned to buy gold bars in the UK and sell it to customers as a wealth-building product in India and at the same time promote another company to trade in the precious metal in the US.
 

In January 2020, Prasad’s company submitted an expression of interest to a consortium of creditors to buy the controversial Lavasa project near Pune in Maharashtra without much success. Interups told regulators that it was in a position to repay Lavasa’s debts totalling $873 million in addition to spending another $600 million to buy Lavasa’s assets. By June, it was eyeing Anil Ambani’s Reliance Naval Engineering in addition to a “large troubled private bank” in India. The plan to buy this “private bank” — which he declines to name in the filing — was put into motion later that month when it pumped in $180 million through an alternative investment fund in India to buy equity in the bank concerned.
 

As India started unlocking from a national Covid-19-induced lockdown, Prasad’s plans extended to investing $5 billion in the country in virtually everything under the sun from airports, ports and highways among others. For Interups, which clocked revenues of $140 million with a profit of $30 million in 2018-19, these business plans were more than just punching above its collective weight. Its real estate ambitions also had Marriott-franchised Viceroy Hotels in addition to investing in a 1,000-acre smart city project near Mumbai in partnership with city-based realtor Nikhil Gandhi. Some recent real estate investments of Prasad’s firm are in a residential project in Bengaluru in a deal that entails buying over 400,000 square feet of built space in housing towers with an investment of $73 million.
 

On Thursday, after media reports emerged of his businesses, Prasad took to social media to say: “To have taken birth in a poor family is not my sin. But to die poor will be a crime.”
 

Prasad got his primary education from a government school in Karimnagar (in present-day Telangana) and graduated from Hyderabad’s Osmania University. His professional profile online states that he started as an audit assistant to a Hyderabad-based chartered accountant before moving to the US some time in 2000 for work. He seems to have come a long way; the question is whether Air India can take him further.