The carrier's sale could pique interest in a number of state-run firms in which the government intends to divest stake.
India’s move to privatize flag carrier Air India Ltd. in its first big-ticket sale in almost two decades promises to further boost the appeal of the nation’s booming equity market just when China is intensifying its crackdown on private firms.
The high-profile sale puts investor spotlight on Prime Minister Narendra Modi’s aggressive reform agenda, as it shows that his plans to tap the private sector for the country’s assets are gaining traction. It could also pique interest in a number of state-run firms in which the government intends to divest stake, providing another potential catalyst to a market that’s rallied to successive all-time highs.
“Air India’s sale is a landmark that shows India is the place to be in emerging markets amid reforms and the painful overhaul in China,” said Sumeet Rohra, a fund manager at Smartsun Capital Pte. in Singapore. “What has happened puts India equity landscape for a bright future with more privatizations, more inflows and more stock gains.”
India’s equity markets, including initial public offerings, have drawn global attention and benefited from the ongoing regulatory clampdown in China as Beijing’s moves to tighten its grip on a swathe of sectors from technology to education to achieve President Xi Jinping’s vision of “common prosperity” has spooked global funds. Powered by record-low interest rates, a retail-investing boom and a spate of tech listings, India’s market capitalization has surged 37% this year to $3.46 trillion, according to an index compiled by Bloomberg.
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