Singapore Airlines (SIA) is set to invest an additional ₹3,194.5 crore in Tata Group-owned Air India after Vistara merges with Air India on November 11, 2024. The merger, first announced on November 29, 2022, will give SIA a 25.1% stake in the expanded Air India. Vistara, which began operations in 2015, was created as a joint venture between Tata and SIA, with SIA holding a 49% share.
As part of the merger, SIA’s contribution includes ₹2,058.5 crore in cash, in addition to its existing 49% interest in Vistara, for a 25.1% equity stake in the new Air India. Following the merger, SIA’s additional investment will amount to approximately ₹31,945 million (about SGD 498 million), to maintain its 25.1% equity share. This capital injection will take place within November 2024 and will come through a new subscription of Air India shares. SIA is also expected to recognize a non-cash accounting gain of about SGD 1.1 billion and will start recording its share of Air India’s financial results.
The merger aims to create a major player in Indian aviation by combining Tata’s offerings in full-service and low-cost segments. SIA will review any future funding based on Air India’s requirements and funding options. This consolidated entity is expected to hold a strong presence across domestic and international air travel, with SIA noting that the merger aligns with its strategy to directly participate in India’s rapidly growing aviation market.
In anticipation of the merger, Air India and SIA have already expanded their codeshare agreement to include 11 more Indian cities and 40 new international routes, enhancing connectivity across their combined network.
Disclaimer: This information is for general purposes only and should not be considered as financial advice. Please consult a financial advisor before making any investment decisions.
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