Indian conglomerate Hinduja Group and Interups, a New York-based investment firm with knowledge of the Indian market, are considering a bid to acquire Air India (AI, Mumbai Int'l), the Business Standard newspaper reported on January 24.

Last year, Hinduja expressed an interest in taking over grounded Jet Airways (JAI, Mumbai Int'l) but opted not to make a formal bid as it realised that the privatisation of Air India could offer better opportunities, the report said.

“We are looking at Air India and will take a decision once the bid documents are in place,” a source at Hinduja Group told the newspaper.

The transfer by the government of a substantial part of Air India’s debt to a special purpose vehicle, plus putting the entire 100% equity of the airline up for grabs, has reportedly added to the temptation.

Laxmi Prasad, the chairman of Interups, told the Business Standard that his company would be a serious contender for Air India, with one reservation.

“We have opened a dialogue with the ministry, and our CEO Louise Jones will be in India next week. We have some concerns on non-inclusion of maintenance, repair, and overhaul assets in the acquisition and would put our appeal before the government, as without MRO it will be difficult for our identified operators to manage aircraft maintenance,” he said.

Air India has its origins as Tata Air Services and Tata Airlines in the 1930s and 1940s, as it was founded by aviator and business tycoon JRD Tata of Tata Sons. It was renamed Air-India (AI, Mumbai Int'l) in 1953. Last year, Tata Sons, which already owns Vistara (UK, Delhi Int'l) and 51% of AirAsia India (I5, Chennai), expressed an interest in buying Air India but may not go ahead due to fears of possible liabilities arising out of litigation.