The Indian government is set to select the successful bidder for Air India in about three weeks and will also finalise the reserve price for the national carrier within the period.
The reserve price will be decided by an inter-ministerial group (IMG) headed by the secretary of the Department of Investment and Public Asset Management (DIPAM), reports in the media said. “Financial bids for Air India disinvestment received by transaction adviser. The process now moves to the concluding stage,” DIPAM secretary Tuhin Kanta Pandey had tweeted on Wednesday.
Final bids for acquiring Air India were recently submitted by Tata Sons and SpiceJet promoter Ajay Singh. The government is selling off its 100 per cent stake in the state-owned airline that has been incurring losses since 2007 when it merged with Indian Airlines. The carrier has accumulated losses of ₹70,820 crore till March 31, 2020.
Decision on the reserve price is expected to be one of the final steps in the Air India divestment process, after which the Centre will aim to complete the transaction by December.
Once the final reserve price is determined, the proposal will reportedly be floated before the Air India Specific Alternative Mechanism (AISAM), headed by Union Home Minister Amit Shah. AISAM members include the finance minister, commerce minister and aviation minister.
The deadline of the deal completion will also depend on approval from the Competition Commission of India and lenders to Air India, which had failed to attract a bidder in 2018 when the government offered to sell a 76 per cent stake.
As of now, it seems either Tata Sons or Ajay Singh will acquire the airline. If the Tatas have the winning bid, then the airline will be back in the hands of its founders. The Tatas had set up Tata Airlines in 1932, which in 1946 was renamed Air India.
Also read: From the Tatas to the Govt and back to Tatas? Legacy of Air India