Tata Sons to buy residual stake in AirAsia India for $19 million

Transaction to be completed by early next year; plans merger with Air India Express once deal is done

Tata Sons is all set to acquire the residual stake of 16.33 per cent in AirAsia India from its joint venture partner, AirAsia Berhad for $19 million (Rs 142 crore).

The valuation is as per the previous transaction under which AirAsia Berhad had sold its 32.6 per cent stake, said a banking source. The Tata group had increased its stake in AirAsia India at a valuation of $115 million.

At present, Tata Sons owns 83.6 per cent stake in the loss-making airline and For the fiscal ended March 2021, the airline had made a loss of Rs 1,632 crore on revenues of Rs 1,359 crore.  

The residual stake acquisition will help the Tata group to consolidate its airline business. Apart from its recent acquisition of Air India, the group holds 51 per cent stake in Tata Sia Airlines. The group also acquired Air India Express, a no-frill airline.

Once the Tata group acquires 100 per cent stake in Air Asia India, it is planning a merger with Air India Express, as indicated by the group earlier.

In October, Tata Sons through its wholly-owned subsidiary Talace Pvt won the race to buy Air India at an enterprise valuation of Rs 18,000 crore.

With this, the Tatas now own 100 per cent stake in Air India (a full-service airline operating in domestic and international markets) as also 100 per cent in its subsidiary Air India Express and 50% in the joint venture Air India SATS (airport services on ground and cargo handling). The total permanent and contractual employee strength of Air India & AIXL is 13,500.