Ajayan, who shot into fame with the only film that he directed "Perunthachen" (master carpenter), died here on Thursday, said his colleague and veteran character actor Nedumudi Venu.
Ajayan breathed his last at a private hospital here after a cardiac arrest, Venu said.
He is survived by his wife and two children.
Venu said it was always a mystery that Ajayan failed to make more movies.
"He was certainly immensely talented but do not know what and where he got stuck. He was my junior in college and we have had a very long association."
State Culture and Cinema Minister A. K. Balan condoled Ajayan's death and said that the impact of his only film will continue for a long time.
Son of the legendary Malayalam playwright, screenwriter and film director, Thoppil Bhasi, Ajayan began his film career under his father and later worked as associate director to legends like Padmarajan and Bharathan.
It was in 1990 that Ajayan turned a full-time director with "Perunthachen", which was a runaway hit and one that won rave reviews and numerous awards.
Ajayan won the Indira Gandhi Award for Best Debut Film of a Director, Kerala State Film Award for Best Debut Director, in 1990.
The film also won the Kerala State Film Award for Best Popular Film in 1990 and was nominated for the Golden Leopard Award at the Locarno International Film Festival in 1992.
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