India’s decision to privatize flag carrier Air India Ltd. promises to bolster the appeal of the country’s booming equity market at a time when China is tightening its grip on private companies. 

The high-profile transaction shines a focus on Prime Minister Modi’s ambitious reform agenda, demonstrating that his ambitions to sell the country’s assets to the private sector are gaining traction. A number of state-run companies in which government plans to sell a stake may also find this interesting, which may result in another potential trigger to the market that has risen to successive all-time highs.

The ongoing regulatory clampdown in China has frightened global funds, and India’s equity markets, including IPOs, have benefitted from it. According to a Bloomberg index, India’s market cap has increased 37% this year to $ 3.46 tn, all thanks to record-low interest rates, a retail investing boom, and a slew of tech debuts. 

Modi’s government is planning an IPO for Life Insurance Corporation of India (LIC), which will be the country’s biggest listing. The government also plans to sell holdings in several companies like Bharat Petroleum Corp., Steel Authority of India, and IDBI Bank Ltd.

Manonmayi

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