The Department of Investment and Public Asset Management said in a tweet, "Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect."
Tata Group and SpiceJet chairman Ajay Singh in his private capacity had bid for debt-laden state-run airline Air India earlier this month.
The government had invited expression of interest for the divestment of Air India in December 2020. Four bidders had entered the race to take over the beleaguered airline, but Tata Group and Spicejet CEO Ajay Singh were the only ones to make it to the final stage.
According to a report from The Indian Express, panel of ministers accepted a proposal from bureaucrats, who recommended the conglomerate's bid ahead of an offer from Ajay Singh, according to people with knowledge of the matter, who asked not to be identified as the decision isn't yet public.
This has been the second attempt by the PM Modi-led government to sell Air India. The Centre had made an unsuccessful attempt to sell the ailing airline earlier in March 2018. However, its expression of interest to sell 76 per cent stake in Air India had no takers at that juncture due to concerns regarding the airline's burgeoning debt, stated reports.