Tata Group wins control of Air India with $2.4b bid

India’s Tata Sons is taking over lossmaking Air India in a $2.4b deal that returns the business to its original founders 68 years after it was nationalised by the post-independence government. The 152-year-old conglomerate was the winning bidder in a protracted privatisation process, having offered $368m in cash for a 100% stake and agreed to take on $2b of the airline’s total $8.2b in debts. The rest of the debt will remain with the state. The sale — due to be completed by the end of December — fulfils a promise made by PM Narendra Modi’s government, after its previous attempt at privatisation in 2018 failed to attract a single bidder for the carrier, which loses about $1b a year. The government, which had sought to retain a 26% stake in its first attempt to sell off the business, subsequently sweetened the terms to attract buyers. “Air India loses Rs200m ($2.6m) a day. Those losses — after the handover — will not come to the taxpayers,” said Tuhin Kanta Pandey, secretary of the finance ministry’s investment department, when the deal was announced. The takeover is also a milestone for Tata Group, which has long had ambitions in the aviation sector and already owns stakes in two small domestic airlines — Vistara, a joint venture with Singapore Airlines, and Air Asia India. Together, these two account for about 11% of the domestic market. “Welcome back, Air India,” Ratan Tata, former chair of the group, wrote on Twitter after the announcement. “While, admittedly, it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation sector.” According to government statistics, Air India today carries less than 12% of India’s domestic passenger traffic, even though New Delhi has provided more than $14b in financial support since early 2009.<br/>