Air India Ltd is offering to sell more than 50 properties and land parcels as the cash-strapped flag carrier makes a renewed attempt to achieve its aim of raising about ₹500 crore from such divestments this fiscal.
The real estate assets that have been put on the block include those that remained unsold last February because of their high reserve prices and overall tepid industry demand.
Air India has put up for auction apartments in Bandra, Mahim, Khar, Colaba, Cuffe Parade, and Malad areas of Mumbai, Bengaluru’s Indiranagar, Navrangpura and Memnagar localities in Ahmedabad, as well as properties and land parcels in Kolkata, Pune, Bhuj, Goa, Gwalior, Trivandrum and Nashik among others, it said in an advertisement in a national daily on Thursday.
The loss-making airline is tapping state-owned MSTC Ltd, which specialises in conducting e-auctions to divest the real estate assets. E-bids for the properties—comprising mostly residential flats and land plots—can be submitted until 12 October.
“Air India hopes to raise at least ₹500 crore from the sale of its real estate assets by end of the current fiscal ,” said a senior airline official, who did not want to be named.
“The airline had earlier raised ₹30 crore to ₹35 crore from property auctions in February this year,” the official said.
Air India has a net debt of ₹55,000 crore, including ₹21,000-22,000 crore of aircraft debt.
The carrier will use the proceedings from its asset monetisation to pare debt. The national carrier also hopes to conclude the sale of its former head office in Mumbai’s Nariman Point to Jawaharlal Nehru Port Trust (JNPT) by the end of the fiscal, with the money also being used to reduce debt.
Air India has found buyers for only one-fourth of the 45 properties and land parcels it put for auction across the country’s major cities and towns in February, Mint had reported in March.
The properties being sold include 14 apartments in Mumbai’s tony Pali Hill area, which have a reserve price of about ₹200 crore, according to Air India’s auction documents of February.
According to the documents, the total reserve price for 41 properties put on the block in February, excluding the Pali Hill property, stood at ₹365.89 crore. Most of these properties remained unsold and have been again put on sale.
“The residential markets (in India) are slowly witnessing a revival, post the slowdown witnessed last year. This has been on account of the uncertainty regarding implications of the Real Estate (Regulation and Development) Act 2016 (RERA) and the goods & services tax (GST) gradually settling,” Ficci and Jones Lang LaSalle India said in a September report titled Future of India Real Estate: Deciphering the mid term perspective.
The report added that prices of residential properties across major Indian cities remain under pressure. The Air India official did not say if the airline has brought down the reserve price of its properties that went unsold in February.
“Air India is committed to its land monetisation program,” the official said.
Air India has been able to raise ₹445 crore from land sales since a government-approved turnaround plan in 2012 set a target of ₹5,000 crore for land monetisation over a decade, minister of state for civil aviation Jayant Sinha told the Rajya Sabha in February. Since then, the airline has raised ₹30-35 crore in asset sale. The airline had not been able to achieve its land monetisation targets because of issues with land title deeds, Sinha had said.
The Air India official mentioned above said that most of the title deeds for properties that the airline is looking to sell in this financial year are in place.
Source: Mint