The government is expected to receive bids for Air India by September 15. According to sources, the reserve price for which the company will be offered to the customers will be decided after receiving the bids.
There is also news that the government may allow foreign investors to invest money in the country's largest insurance company LIC's pre-IPO funding program. It is currently being considered to allow FII/FPI ie Foreign Institutional Investor/Foreign Portfolio Investor to invest in the company before the IPO. The FDI limit in insurance does not apply to LIC. This is because there is no provision in the LIC Act for foreign investment in the company.
Union Minister of State for Civil Aviation VK Singh, in a written reply to a question to Parliament in July, had hoped to receive financial bids for the company by September 15. He had said that the last date for submission of Expression of Interest (EoI) was fixed till December 14 last year. EY had received EoIs from many companies. VK Singh had said that after privatization. The movable assets of the airline will be handed over to the new owner. To reduce the debt of the company, its immovable assets are being monetized.
Aviation consultancy firm Kappa India in its India Aviation Outlook FY22 had said the company's liabilities could exceed $20 billion by 2024-25. This will also include its losses during FY21 and FY22 due to Kovid. Air India has never been in net profit since its merger with Indian Airlines in 2007. The company is estimated to have a loss of ₹9,500- ₹10,000 crores for the quarter ended March 2021.
The government wants to sell its entire stake in Air India before the end of this financial year. According to the latest information, Tata Group was the frontrunner. And SpiceJet CMD Ajay Singh was shortlisted to speak in private.
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