The Adani group has incorporated an aircraft owning and leasing company in Gujarat’s GIFT City, marking its entry into this business after two of the country’s leading airlines – IndiGo and Air India – formed subsidiaries for the same.

Udanvat Leasing IFSC was incorporated on October 23 by Adani Ports and Special Economic Zone with an authorised and paid-up share capital of `2.5 crore divided into 2.5 million equity shares of `10 each.

“Udanvat is incorporated with an objective to carry out business activity of owning and leasing of aircraft,” said Adani Ports and Special Economic Zone in a regulatory filing.

The Adani group is already a major player in the airport business, controlling 23% of the country’s total passenger traffic, by the end of August. Adani Airport Holdings has seven operational airports, including Mumbai, Ahmedabad and Lucknow, while one airport at Navi Mumbai is under development.

Gujarat International Finance Tec-City (GIFT City) has India’s maiden International Financial Services Centre (IFSC), which is positioned as a gateway for inbound and outbound requirements of international financial services in India.

Its overarching goal is to provide financial services currently consumed outside India by overseas financial institutions and overseas branches/subsidiaries of Indian financial institutions. GIFT City claims to offer a competitive tax regime and regulations for leasing companies.

Nearly 1,400 aircraft are on order by just two Indian airlines, IndiGo and Air India, who control nearly 90% of the domestic market. Akasa Air, the newest airline in India, said it will place orders for aircraft running into three digits before the end of this year.

While there are no aircraft leasing companies in India, some of the biggest companies in the business are based in Ireland. More than 80% of operational aircraft possessed by the Indian airline companies are leased. These companies have to pay lease rentals which are often exposed to currency fluctuations.