Air India Disinvestment Story continues.
The department of investment and public asset management (Dipam) hopes to succeed in privatising Air India. The disinvestment target for 2019-20 (FY20) is likely to be around Rs 80,000 crore, the same as that of FY19.
As per sources in the government, ‘The first two issues we want to tackle and complete in FY20 are Air India and Hotel Ashok.’
The much-anticipated sale of Air India, and its subsidiaries, in this fiscal did not attract any buyer. Dipam and the civil aviation ministry want to try again in the next fiscal year. The officials, however, are confident of meeting this year’s disinvestment target.
Apart from Air India, there are around 20 companies which the government has earmarked for strategic sale. Dipam plans to complete the strategic sale of Pawan Hans, Central Electronics, Air India’s ground handling subsidiary and Scooters India this year, but some of these plans may get carried over to the next fiscal year.
“Strategic sales aren’t easy. A lot in these five years was spent on preparing the groundwork, including identifying the PSUs which the government can sell off. Now, that work will bear fruit. If the political leadership of the day allows, over the next few years, we can complete the strategic sale of a number of these PSUs,” said an official.
The government seems set to divest more India Tourism Development Corporation hotel properties, including leasing out of its marquee hospitality property, Hotel Ashok, in New Delhi. Dipam and the ministry of tourism are working on it so that a deal can be placed in front of the cabinet committee on economic affairs in the next fiscal year. The lease is being structured in an open manner, suggesting the entity operating the hotel may have the option of buying it outright at the end of the lease period. The government is looking to find such a prospective operator.
In addition, the government is banking on a number of initial public offerings (IPOs), and further tranches of its two exchange-traded funds (ETFs).
The finance ministry has started work on the merger of three state-owned unlisted insurers — National Insurance, Oriental Insurance, and United India Insurance — and then list the merged entity. This process is expected to be completed in the next fiscal year.