Indian government to close Air India sale in FY2022


The government of India might not be able to close the Air India sale by the end of the financial year of 2021. The process might be moved to the next financial year of 2022.

Air India’s privatization plan might be moved to the financial year of 2022, as the government of India might not be capable of concluding the airline’s divestment process in the remaining three months of FY2021. The financial year in India begins on April 1 and ends on March 31, meaning that FY2022 starts on April 1, 2021. 

Because the bidders will be given the access to virtual data room (VDR) of Air India only by January 6, 2021, the government considers that the transaction of the air carrier’s shares might be concluded only in the new fiscal year.

The Indian government initiated the sale of 100% of Air India’s equity share capital in January 2020, setting an initial deadline for bidding in March 2020. However, the deadline was extended a few times and the bidding process was closed only on December 29, 2020.

The US-based fund Interups (ITUP), one of the bidders that were expected to put the physical bid in Air India’s sale, withdrew its bid at the last moment of the deadline to submit a physical copy of its EoI on December 29, 2020. The investment firm initially hoped to step into a partnership with another bidder, a group of more than 200 Air India’s employees. The employees could purchase the controlling stake (51%) in the Indian airline, while the fund would hold the remaining 49%. 

However, the ITUP argued the decision to cancel the bidding as per rules “no two interested bidders either individually or as a member of consortium shall be entitled to take the benefit of the financial strength of the same affiliate for the purpose of participating in the proposed transaction either directly or indirectly,” Laxmi Prasad, the founder of ITUP, told local media on December 29, 2020.

Another bidder, a group of more than 200 Air India’s employees, led by Commercial Director of the airline Meenakshi Malik, had already submitted all needed documents regarding its separate consortium and had reportedly found another undisclosed financial investor as per bidding conditions. While the employees are not able to cooperate with a private company, they are allowed to set a partnership with a bank or any other financial institution. 

Meanwhile, Tata Sons, the holding company of the $113 billion “salt-to-software” conglomerate, is believed to have entered the bidding through AirAsia India, its joint venture with AirAsia Group in which it holds a 84% stake. 

Ajay Singh, the CEO of Indian low-cost airline SpiceJet, had also reportedly bidded for Air India’s stake. However, neither Tata Sons nor Singh have yet officially confirmed their interest in the airline. 

According to the latest governmental update, the list of bidders for Air India‘s stake will be formed by January 5, 2021.


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Gabriele Petrauskaite
Journalist[br][br]Gabriele is an experienced journalist and content creator in AeroTime’s editorial team, based in Vilnius, Lithuania.[br]
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