On April 28, India's government extended the deadline to submit bid documents for Air India (AI, Delhi International), from April 30 to 30 June, given the coronavirus pandemic and ongoing nationwide lockdown.
This is the second time it has made such an extension for expressions of interest, further delaying the privatisation of 100% of the flag carrier and subsidiary Air India Express (IX, Delhi International), having done so previously from the original date of 17 March to April 30.
An unnamed Finance Ministry official told the Indian financial daily Mint that the government is willing to wait until the end of the current financial year to achieve a sale.
“There is no hurry. We have time until March 31 next year,” he said.
Potential bidders may need additional time to complete their analysis of Air India, observers have commented.
“There are valuation and market demand concerns, as the aviation sector [...] has had a severe impact from Covid-19. What will be important for the government is receiving the right kind of bids that can lead to closing the deal once the economy and market dynamics show signs of stabilisation,” said corporate M&A lawyer Dipti Lavya Swain.
Strategic privatisations of both Air India and state-owned Bharat Petroleum are crucial for the government to achieve its disinvestment target of INR2.1 trillion (USD27.7 billion) for 2020-21. The government missed the target for last year after deferring a number of offers for sale due to volatility in the equity market, including that of state-owned aerospace and defence firm Hindustan Aeronautics (Bengaluru HAL).
