Tata Sons has been selected as the winning bidder to take over state-run carrier Air India, the government said on Friday, marking the end of years of struggle to privatise the financially troubled airline.
Tata Sons, the holding company for the autos-to-steel Tata conglomerate, will pay 180 billion rupees ($2.4 billion) for a 100% stake in Air India, Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management, said.
The bid amount includes Tata's taking on of about $2 billion of the national flag carrier's $8.2 billion total debt.
A successful privatisation of Air India, which was founded as Tata Airlines in 1932 before being nationalised in 1953, would be a major victory for Prime Minister Narendra Modi as the loss-making carrier has cost taxpayers an average of nearly $3 million a day for the past decade.
The sale also bodes well for Modi's plans to sell stakes in a slew of state-run firms to bolster government coffers and make India a fully market-driven economy.
Tata currently operates Vistara, India's only other full-service carrier, in a venture with Singapore Airlines as well as budget airline AirAsia India, a venture with Malaysia's AirAsia Group.