The Centre is expected to divest 100 percent stake in the national carrier, Air India Express as well as half of its total stake in the handling corporation, AISATS (Air India SATS Airport Services Private
On October 1, 2021, the government of India gave the green signal to consider Tata Sons as the winning bidder for debt-clad national carrier, Air India.
Tata Sons, the principal investment company of Tata Group, was observed evidently leading the bidding race to win control over the carrier among various bidders including SpiceJet founder Ajay Singh. They had submitted their bids last month for acquiring state-operated Air India.
Both the bidders had submitted their SPA (Share Purchase Agreement) on September 29, 2021. It is reported that the proposed bid by Tata Sons was about Rs. 3,000 crore higher than the reserve price sketched out by the government which falls between Rs. 15,000 crore and Rs. 20,000 crore.
One of the Centre officials disclosed that the reserve price was finalized post the bids called by the bidders in order to maintain secrecy.
The disinvestment procedure was planned to be carried out right after the announcement of the bidding winner by the committee which included head officials, namely- Nirmala Sitharaman as the Union Finance Minister, Piyush Goyal as Commerce Minister and Jyotiraditya Scindia as the Aviation Minister.
The Centre is expected to divest 100 percent stake in the national carrier, Air India Express as well as half of its total stake in the handling corporation, AISATS (Air India SATS Airport Services Private Limited).
The chances of being chosen as a winner in the Air India bid for Tata was fairly high as the bid amount submitted was considerably high, Rs. 5,000 crore higher than the bid submitted by the SpiceJet founder. Also, the fact that Tata is India’s conglomerate giant which has full potential of reviving debt-clad carrier backs it as the most deserving bidder for winning control over Air India. The conglomerate corporation has also been operating its Vistara carrier in collaboration with Singapore Airlines.
The Indian government started selling Air India shares for the sake of disinvestment last year in the month of January. However, it continued getting postponed considering the Covid-19 outbreak. Finally in April this year, the centre called for interested and potential bidders to submit their bids.
Post the announcement of the committee of Tata Sons as the winning bidder, the company will be crowned with the control of more than 4,000 domestic landing as well as 1,800 international ones including over 900 parking areas at airports overseas.
Tata is in the spotlight for having planned to bring AirAsia India under its newly won carrier Air India wing.
Based in New Delhi, Air India was originally founded by J . R. D. Tata under the name Tata Airlines in 1932. It was nationalized in 1947 where the government established 49 percent of its control over the carrier.
The losses faced by the national carrier in 2006-7 was around $110 million which ramped up to $1 billion after the merger of Air India with Indian Airlines. It has been incurring losses since then. However, after Tata’s comeback in Air India, it is anticipated that the carrier will be witnessing revival growth in coming years.
