According to persons familiar with the situation, Air India Ltd. is exploring raising at least $1 billion in a capital round that could value the airline at $5 billion.

According to the persons, the carrier, which is owned by the Tata Group, the oldest conglomerate in India, is in talks with a number of possible investors, including sovereign wealth funds and private equity firms. According to the people, who not to be named because the information is confidential, Air India is collaborating with financial advisers on the fundraising, which could be finished in the coming months.

The size and timetable of the investment round, as well as other elements, are still subject to discussion, the people added. A Tata Group spokesman declined to comment, while an email requesting comment from an Air India representative was not immediately answered.

The fundraising initiatives come at a time when Air India is thinking about acquiring as many as 300 narrowbody aircraft, according to a June report by Bloomberg News. As the once state-run airline tries to rebuild its fleet under new management, the purchase could be one of the largest orders in commercial aviation history.

Air India, formerly renowned for its upscale services and celebrity-studded commercials, still has profitable landing slots at most major airports, but it is challenged by foreign airlines that fly nonstop to India as well as airlines that use Middle Eastern hubs. Air India might reduce expenses and more effectively compete with competitors who offer lower tickets by placing bulk orders for new aircraft, especially with advantageous conditions on long-term maintenance.

The airline stated on Friday that, starting in the following month, it will gradually add 20 more weekly flights to San Francisco, London, and Birmingham. It will add 40 and 48 weekly flights to the US and the UK, respectively.