US-based private equity firms KKR & Co. and Warburg Pincus have expressed an interest in acquiring parts of Air India (AI, Delhi International) which is currently slated for privatization.

India's LiveMint newspaper quotes sources familiar with the situation as saying the two firms have separately sought details on the privatization process. However, talks are currently at a very early stage with no firm commitments having yet been made.

Other firms that have already expressed an interest include Tata Group and low-cost carrier IndiGo Airlines (6E, Delhi International).

New Delhi is expected to issue a Request For Proposals (RFP) for banks and financial institutions to handle the sale in the coming weeks.

Before any successful sale can be carried out, Narendra Modi's government will have to address the question of the airline's significant debt overhang, said to amount to INR488.8 billion rupees (USD7.6 billion) as of March 31, 2017.

A committee including the Minister of Finance and Civil Aviation has since been convened to determine a way forward concerning all matters involved in the sale. Aside from debt treatment and the size of the stake New Delhi plans to relinquish, the committee is also looking at the unbundling and strategic disinvestment of Air India's three profitable units - Air India Express, Alliance Air (India), and ground handling firm Air India Transport Services Ltd.