Tata Group-controlled airlines raise $350 mln via overseas debt Oct

Informist, Monday, Dec 4, 2023


MUMBAI – Months after placing one of the world's largest-ever aircraft orders, Air India has begun raising funds through overseas debt. Tata Group-controlled Air India raised $240 mln via external commercial borrowing in October after raising $120 mln in September, according to Reserve Bank of India data.


Air India in June signed agreements with Airbus and Boeing to buy 470 aeroplanes, for a total of $70 bln.


Another Tata Group airline, Vistara, raised $110 mln through overseas debt in October. Vistara also raised $97.16 mln in May and $182 mln in August through external borrowing.


All this fund-raising comes at a time when the two airlines are in the middle of a merger. In September, the Competition Commission of India approved the merger of Tata SIA Airlines, which operates under the brand name Vistara, into Air India. Tata SIA Airlines is a joint venture between Tata Sons and Singapore Airlines.


In November, the Tata Group and Singapore Airlines announced that they would merge their jointly-owned airline Vistara into Air India, giving the Tata Group at least 51% stake in the merged entity. Singapore Airlines will be a minority stakeholder with 25.1%.


Air India is not alone in the race to raise funds for its expansion plans. InterGlobe Aviation Ltd, which operates IndiGo, raised $450 mln through external borrowing in September. IndiGo also placed a huge order for aircraft earlier this year. It has ordered 500 planes from Airbus at a total cost of over $50 bln.


IndiGo, Air India, and Vistara have a combined share of over 80% in India's domestic aviation market. IndiGo had a 62.6% market share in October, while the share of Air India and Vistara, respectively, was 10.5% and 9.7%.


Today, shares of InterGlobe Aviation ended 2.7% higher at 2,820.25 rupees on the National Stock Exchange.  End


US$1 = 83.37 rupees


Reported by Shubham Rana and Kshipra Petkar

Edited by Rajeev Pai


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