The government has finally managed to spark interest in the strategic disinvestment of Air India, having received multiple expressions of interest, according to the secretary of the department of investment and public asset management (DIPAM). Mint takes a deep dive.
Why is Air India seeing greater interest now?
The Union government has sweetened the deal for investors as the Air India Ltd sale evoked no response initially. This could have possibly encouraged interested buyers. For one, 100% of Air India is up for grabs, compared to just 76% earlier. The government also made a change in the terms of bidding by allowing potential investors to bid on the basis of enterprise value, which is equity value plus net debt. As a result, investors can determine the amount of Air India’s debt that they would want to take on, rather than being saddled with a fixed quantum of debt determined by the government.
