The Indian government is keen to meet this year’s annual disinvestment target of one trillion rupees (US$ 13.9 billion) and aims to sell the ailing state-owned carrier Air India and petroleum refiner Bharat Petroleum Corporation Limited among other state-owned enterprises.
Finance Minister Nirmala Sitharaman told Times of India daily that the government plans to wrap up sale of the two companies by March 2020.
The minister claimed that many players are interested in buying Air India, contrary to a tepid response received during the bidding process a year ago. In 2018, the government put up for sale 76% of Air India. That drew weak demand from investors.
This time the government wants to completely sell off the airline. Certain aviation players, notably Tata Sons, are reportedly keen to buy the airline.
Tata Sons executive chairman Natarajan Chandrasekaran had recently said they need more details from the government on the process.
“We will definitely look at it,” Chandrasekaran said, adding, “We still don’t have all the details. Every business proposal will be very seriously looked at and we will look at that (Air India). Definitely. But currently we don’t have the data”
He added: “There are so many different groups within Air India and then there is real estate, there is debt, there is liabilities and we’ve got to look at all of that but we will definitely look at it,” he told the CNBC TV channel.
Air India employees are opposed to the move and have threatened to launch an agitation.
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The government also wants to sell its 53.3% stake in Bharat Petroleum Corporation of India. It expects to see bids from international oil giants such as Saudi Aramco, Rosneft, Kuwait Petroleum, ExxonMobil, Shell, Total SA and Abu Dhabi National Oil Co.
The other state-owned enterprises it wants to sell include Shipping Corp of India, North Eastern Electric Power Corp Ltd, and a 30% stake sale in Container Corp of India.
The government wants to sell off these enterprises to make up for the steep economic slowdown and the resultant shortfall in the collection of goods and services tax.
India’s GDP growth in the previous quarter was 5% and for the forthcoming quarter several rating agencies have forecast that the growth rate will fall below 5%.
The minister, however, expressed confidence that the economy will bounce back soon and that recent steps taken to boost the ailing economy will result in higher collection of goods and services tax.