Air India had put 45 properties worth Rs 365 crore under the hammer back in February but could only raise Rs 30-35 crore from the sale.

Flag carrier Air India, which is currently under a debt of around Rs 55,000 crore, is looking to auction off several of its residential properties and land holdings across the country expecting to raise at least Rs 550 crore. These include 14 residential apartments owned by the airline in the high-end Pali Hill area of Mumbai, estimated to be worth Rs 200 crore at reserve price. Air India had put 45 properties worth Rs 365 crore under the hammer back in February but could only raise Rs 30-35 crore from the sale, as per a senior airline official.

“Air India has targeted raising Rs 500 crore from monetising real estate assets by March 2019. The previous sale was largely unsuccessful because bidders found the reserve prices to be high. The unsold properties have been included in this round of auction,” the official said on condition of anonymity, adding that the proceeds will be used to pare the airline’s debt. The cash-strapped Air India earlier this month received an equity infusion of Rs 980 crore from the government, and is in process of raising debt of Rs 500 crore from domestic banks.

The properties put up for auction includes the airline’s apartments in localities such as Bandra, Khar, Colaba, Cuffe Parade, Mahim and Malad in Mumbai; Bengaluru’s Indiranagar; Navrangpura and Memnagar in Ahmedabad, and several other apartments and land parcels in Kolkata, Pune, Goa, Gwalior, Bhuj, Thiruvananthapuram and Nashik. Air India said in its tender notice issued on Thursday that the auction will be conducted by MSTC and a pre-bid will have to made along with an earnest money deposit ahead of the e-auction.

As per a report by FICCI and Jones Lang LaSalle earlier this month, prices of residential properties across major cities were under pressure, but were witnessing a slow revival. “The residential markets are slowly witnessing a revival, post the slowdown witnessed last year. This has been on account of the uncertainty regarding implications of the Real Estate (Regulation and Development) Act 2016 (RERA) and the GST gradually settling,” the report said.

In February, MoS for Civil Aviation Jayant Sinha had told Parliament Air India had been able to mop up Rs 445 crore from monetisation of its land assets since 2012. Under the Turn Around Plan approved by CCEA in 2012, Air India had targeted monetising its assets and generate Rs 5,000 crore over a 10-year period until 2021 by way of sale, leasing or developing an asset as a JV.

Sinha had explained that the carrier was not able to meet its target because of problems with land titles. “Air India was unable to meet the target under the asset monetisation plan due to problem with land titles. The high value properties allotted to AI for specific purpose had end use restrictions and did not have clear marketable titles as they were allotted on perpetual lease basis,” he had said.

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