Government preparing to sell these two subsidiaries of Air India, process of privatization started

Air India subsidiaries privatization The government has become active regarding the privatization of Air India subsidiaries. Bids are likely to be invited for the same soon. DIPAM has started its preparation. This is being done keeping in mind the disinvestment target of the government.

Government preparing to sell these two subsidiaries of Air India, process of privatization started
Air india, image source: REUTERS

The Central Government has started the process of privatization of AIASL and AIESL, two subsidiaries of former national airline Air India. This is being done under the disinvestment target of the government. 

Talking to news agency PTI, a government official said that the Department of Investment and Public Asset Management (DIPAM) has started meetings and road-shows with investors for privatization. We will be inviting EOIs from interested bidders very soon.

Air India's four subsidiaries

After the sale of Air India to the Tata Group, the government is left with four Air India subsidiaries. This includes Air India Airport Services Ltd (AIASL), Air India Engineering Services Ltd (Air India Engineering Services Ltd -AIESL), Alliance Air Aviation Ltd (Alliance Air Aviation Ltd- AAAL) and Hotel Corporation of India Ltd. Hotel Corporation of India Ltd-HCI).The deal with Tata did not cover Air India's non-core assets, paintings and works of art and non-operational assets. 

The total value of the non-core assets of these subsidiaries is around Rs 15,000 crore, which has now been transferred to Air India Assets Holding Ltd (AIAHL)

Debt on air india

Air India was bought by the Tata group from the government on January 27, 2022 for Rs 18,000 crore. In this deal, out of Air India's total debt of Rs 61,562 crore, Rs 15,300 crore was transferred to the Tata group. The remaining 75 per cent, around Rs 46,000 crore, was transferred to AIAHL. 

Government's goal of privatization

The central government has set a privatization target of Rs 65,000 crore for this financial year. So far the government has raised Rs 25,000 crore through privatization. This also includes the money raised through LIC IPO.