Air India’s March divestment EoI move got no response: DIPAM

New Delhi: The government may be keen on divesting its stake in Air India and its subsidiaries in the current financial year (FY20), but the expressions of interest (EoIs) sought for the carrier towards the end of FY19 failed to evoke any response.

The FY19 ended with the Department of Investment and Public Asset Management (DIPAM) garnering Rs 5,000 crore over and above the disinvestment target of Rs 80,000 crore, mainly on the back of Power Finance Corporation-REC deal, public sector undertakings (PSU) shares buybacks, proceeds of enemy property and exchange-traded funds (ETFs).

If the Air India sell-off doesn’t move even in FY20, there could be more ETFs in this financial year as well.  In an internal note on FY19’s performance, the DIPAM has given out a status report on implementation.

On announcements that don’t specifically belong to FY19 and date to earlier financial years as well, the note said, “The government has approved listing of 14 central public sector enterprises (CPSEs), including two insurance companies, on the stock exchanges.”

The process of strategic disinvestment has been initiated in 24 CPSEs, which includes Air India. Of these, ONGC-HPCL deal was completed in FY18 and strategic disinvestment process of 23 CPSEs/units of CPSEs are in different stages of implementation.  “For Air India, EoI/PIMA (preliminary information memorandum) was issued on March 28, 2018. No bids were received,” the status report said.

Air India has around Rs 55,000 crore debt burden. After the failure to get a single bid, the government had decided to first turn Air India around and then sell it. The plan to sell subsidiaries and lands, however, has been retained. This may change as the carrier, along with its three units, may be up for sale on current status.

On other related issues, it said: “The government and market regulators have taken necessary measures for development of monetising vehicles, like Infrastructure Investment Trust (InvIT) and Real Investment Trust (ReITs). The government would start monetising select CPSE assets using InvITs from next year”.  The department is preparing a draft institutional framework for asset monetisation of CPSEs.

The DIPAM’s reliance on debt ETFs was visible in 2018-19 disinvestment target fulfilment.

“The government introduced ETF Bharat-22 to raise Rs 14,500 crore, which was oversubscribed in all segments. The DIPAM will come up with more ETF offers, including debt ETFs,” the note said.

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