InvestorQ : What is the latest on the proposal privatization of Air India, which has been pending for a long time?
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What is the latest on the proposal privatization of Air India, which has been pending for a long time?

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Tisha Malhotra answered.
4 weeks ago
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The PM has confirmed that the government is close to inviting financial bids for Air India as they do not want to risk continuing the airlines for too long on taxpayer’s money. Bidders will be given a total of 90 days to submit their financial offer. As per reports in the press, the Tata Group and SpiceJet Chairman Ajay Singh have been shortlisted to bid for the struggling carrier. The last few attempts to sell the carrier had elicited little interest from buyers.

Additionally, the sale is also key for Finance Minister to achieve her monetization target through PSU divestments and through strategic sale. They have an ambitious target in the current year in excess of Rs.200,000 crore. It is reported that the government proposes to wrap up the transaction by June 2021, which does sound a tad ambitious. Both, the Tatas and Ajay Singh will submit bids after due diligence.

Since Air India is a state owned property and has access to some of the high security areas of India, there is an additional security clearance for the shortlisted bidders that will also proceed simultaneously after the government invites financial bids. The big issue will be how the buyer is able to monetize the property.

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