According to the report, the owners of the company reduced their quantum of investment in the airline from an expected Rs 234 crore (RM150 million) to Rs 51 crore for this year.

AirAsia Bhd and Tata Sons are the major shareholders.

The Business Standard report says this cut in funding will impact growth of the airline in India.

It quotes Kapil Kaul, CEO, South Asia at Sydney-based consultant CAPA-Centre for Aviation as saying Rs 51 crore is extremely inadequate, adding that AirAsia India is under capitalised at the moment.

It quotes an AirAsia spokesperson as saying the airline is in its growth phase and is rapidly expanding its business. However, she refrained from responding to a detailed query seeking comment over the reduction in funding.

Another airline official said he expects the funds to come in tranches.

On June 14, the board of AirAsia India had committed to infuse fresh funds worth Rs 234 crore into the airline. Tata Sons and AirAsia Bhd had agreed to approve a fresh issue of shares valuing the amount on a rights basis.

But, according to documents filed by the company and reviewed by Business Standard, the board, in a subsequent meeting on September 30, approved fresh shares worth Rs 51 crore, much lower than the original amount that was initially planned.

The report says experts feel a corporate battle at Tata Sons and allegations of fraudulent transactions made by its former chief executive have impacted the decision.

However, they believe it will be back on track, saying this is an interim funding till things are in order.