DIPAM to fast track sale of 2 Air India subsidiaries, may invite EOIs this month

AIESL, the largest of the three, is India’s biggest maintenance, repair, and overhaul (MRO) service provider

The department of investment and public asset Management (DIPAM) is set to invite expressions of interest (EOIs) for the strategic sale of at least two of the three remaining Air India subsidiaries this month, sources have told Moneycontrol.

The move is aimed at fast-tracking the long-delayed sale process of Air India’s non-core entities – Air India Engineering Services Ltd (AIESL), AI Airport Services Ltd (AIASL), and Airline Allied Services Ltd (AAAL), which remain in government control after Air India’s sale to the Tata Group in 2021.

“The EOIs for at least two of Air India’s erstwhile subsidiaries are likely to be invited this month. We are aiming for that. It's not yet decided which two but any two of the three subsidiaries,” a senior government official told Moneycontrol on condition of anonymity.

The three subsidiaries – AIESL, a maintenance, repair and operations (MRO) firm, AIASL, a ground-handling company, and AAAL, which operates as Alliance Air  – were transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle created in 2019 to hold Air India’s non-core debt and assets.

While the cabinet cleared their strategic sale in 2017 along with that of Air India, the divestment process was delayed due to complex valuations and subdued investor interest.

The Centre is now pushing ahead to complete their sale as part of its disinvestment pipeline for FY26.

Last year, DIPAM conducted roadshows in Mumbai to engage investors for AIESL and subsequently, received approval from the empowered group of ministers to begin the disinvestment process.

AIESL, the largest of the three, is India’s biggest MRO service provider. AIASL manages ground-handling operations at several airports, while AAAL offers regional flight services.

In the Budget 2025–26, the government did not lay down a separate disinvestment target. Instead, proceeds from stake sales and asset monetisation have been consolidated under a Rs 47,000-crore miscellaneous capital receipts head.

A government estimate had earlier pegged potential receipts from the sale of Air India subsidiaries at around Rs 3,000 crore.

According to AIESL’s annual report, its revenue from operations rose to Rs 1,953.40 crore in 2022–23 from Rs 1,881.91 crore in the previous year, while total revenue increased to Rs 2,029.86 crore.