Kotak fund buys 10% in Paramount airline

Market sources put the deal size close to Rs 70 crore.

Kotak Mahindra's private equity fund, India Growth Fund (IGF), has picked up a 10 per cent stake in Paramount Airways - the Coimbatore-based start-up, low-cost carrier.

Paramount Airways managing director M Thiagarajan confirmed the deal but declined to divulge the size. However, market sources said the size of the deal could be about $15 million (nearly Rs 70 crore). This means the airline is valued at $150 million (nearly Rs 700 crore).

A senior Kotak executive, too, confirmed that the group has picked up 10 per cent stake in Paramount airline.

The deal follows acquisition of a 2 per cent stake in Paramount by Bennett, Coleman & Company "� owner of the Times of India group publications "� for $3 million.

Bangalore-based UTI Venture Fund had also been in the race for a minority stake in the company.

Highly placed sources said Paramount Airways has chosen Kotak fund for strategic reasons. "The deal is not only aimed at raising funds. The association with a financial service provider like Kotak is expected to help the airline in many ways, particularly in mobilsing funds," analysts said.

Paramount launched its commercial flights on October 19. With its new generation Embraer 170/190 aircraft, the airline currently operates eight services a day to destinations including Coimbatore, Chennai, Delhi and Kochi.

The airline has drawn up ambitious $525 million plans for acquiring 15 aircraft including Embraer 170, Embraer 175 and Embraer 195. Flying high

The deal follows acquisition of a 2 per cent stake in Paramount by Bennett, Coleman & Co for $3 million

The association with Kotak is expected to help the airline in many ways, particularly in mobilising funds

Paramount launched its commercial flights on October 19. With its new generation Embraer 170/190 aircraft, the airline currently operates eight services a day