Air India to fetch better valuation if sold with zero debt, say bidders

Debt-free airline is a good opportunity to invest, say prospective buyers

With the government looking at options to sell Air India (AI) with zero debt, bidders said the airline would fetch a far better valuation if Rs 5,000 crore of finance cost is knocked off the company’s balance sheet.
 

“After the zero-debt sweetener, Air India looks attractive as it will be easier to turnaround the airline,” said one of the potential bidders. Though the pandemic has hit the valuations of the airline worldwide, the company will be able to fetch a good bid for the government, he added. In FY19, Air India’s finance cost was Rs 4,896 crore on a debt