InvestorQ : When does the bidding process for the Air India disinvestment come to a close?
diksha shah made post

When does the bidding process for the Air India disinvestment come to a close?

Answer
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4 months ago


No prizes for guessing, but the government has extended the deadline for submission of bids for Air India by another two months. The original deadline was supposed to expire on June 30, but now stands postponed till August 31. Of course, with the COVID-19 and the subsequent lockdown across India, divestment was impractical at this point of time.

The strategic divestment of Air India has already been sweetened by the government by transferring a chunk of its debt to a SPV. This makes the deal more attractive for the potential bidders. This divestment is a key component of the government’s Rs.2.20 trillion divestment targets for fiscal 2020-21 and the government is largely counting on it.

The bigger challenge for Air India divestment could be on the business front. Airlines globally are going through one of the worst phases and it may take a long time for these businesses to get back to normal. That may require government support and the government therefore needs to consider how it would impact valuations.