Monday, October 11, 2021

Tata-Air India deal: Analysts see aviation sector to go for re-rating, revaluation

With the Tatas winning the bid for Air India, the aviation sector is expected soon to go for re-rating and revaluation. The analysts believed that the news of the Tatas taking back the control of Air India almost after 68 years has boosted the confidence within the industry.

Quoting it as a landmark development for the aviation sector, TradeSwift’s Director and the market expert Sandeep Jain said, the chances of the government coming up with more developmental initiatives are high with Tatas buying the Air India. He added that it eventually increases the confidence within the overall sector and believes the sector would soon go for re-rating and re-valuation. 

The market analyst isn’t much bullish on the aviation companies stock due to pricing war and the sector being impacted through multiple factors both domestic and global. Jain added, Indigo, an aviation market leader, now likely to see stiff competition from a big brand like Tata.

Air India has gone to good hands, to its founder and pioneer, the TradeSwift Director said, he further added, “The government has received a major impetus for its divestment strategies and plans amid Tatas acquiring controlling stake in Air India.”

The market analyst also pointed out, the government is likely to be more aggressive to sell their sick and ailing public sector units with Air India’s divestment in the third attempt. 

Similarly, Dolat Capital Head of Research Amit Khurana mentioned that Tatas overtaking Air India is good for the aviation sector, because it now has a new player now with deep pockets and good branding. He added, “Tatas will look to consolidate all the business in on umbrella and should lead to the better availability of services for the consumers and eventually good for the country at large.”

Khurana said, “It will add a high amount of intensity in the sector as Tatas have a strong commitment towards the business and have already set new benchmarks with already existing Vistara airlines.”

“India is the only aviation market, which is actually growing in leaps and turns, while competition will go up with the sector certainly to see growth and opportunities going ahead,” the analyst said. 

“The Air India privatisation deal is a unique deal of disinvestment where the government gave various flexibilities to the prospective buyer to attract more bids from investors,” MVIRDC World Trade Center Mumbai Chairman Vijay Kalantri said in a comment on the Tata-Air India deal.

11/10/21 Vaibhav Gautam Bansode/ZeeBiz

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