Maharashtra is poised to become the new owner of the iconic Air India building at Nariman Point, Mumbai, following the state government’s fresh offer of ₹1,600 crore to acquire the property.
“The fresh offer by the Maharashtra government has been accepted, and the process is on within the government to clear the sale. The final approval will come from the ministerial group (headed by Union home and cooperation Minister Amit Shah),” an official said on a condition of anonymity.
Buying the Air India building makes eminent sense for Maharashtra since Mantralaya, the state government’s administrative headquarters built in 1955, is located nearby.
As part of the divestment plan of Air India, the government took over Air India’s debt of about ₹45,000 crore and all non-core assets (about 111 properties), including the office building and housing colonies, estimated to be valued at ₹14,718 crore, according to a government statement issued in 2021.
A decision was also taken that assets, where the rights of the land were with government departments or state governments, would be sold to the respective entity. The Maharashtra government had handed the land for the sea-facing property to Air India in 1970 for a 99-year lease.
Air India, the erstwhile state-run airline, has made several attempts to sell the Nariman Point building since 2018, but the process has not been successful. Several state-run companies, including the Life Insurance Corp. of India and Jawahar Lal Nehru Port Trust, had shown interest in acquiring the 23-storey commercial tower in the past.
So far, most properties with clear records have been sold under four rounds of e-auctions, and a few big-ticket properties are under process to be monetized, including the Vasant Vihar colony spread over 30 acres and a large plot measuring 14,326 square meters at Baba Kharak Singh Marg in Delhi. The decision on the Delhi headquarters of Air India will be taken next year as the Tata Group has the right to use that building until January of 2024, the second official added.
All the sale proceeds will be used to service interest payments on non-convertible debentures issued as part of various Air India debt restructurings in the past and are part of AI Assets Holdings now.