The finance ministry has asked Airports Authority of India to issue shares in lieu of the Rs 656 crore capital it has received from the government, sources said. AAI, a 100 per cent government owned statutory corporation, was constituted by an Act of Parliament and came into being on April 1, 1995, by merging erstwhile National Airports Authority and International Airports Authority of India.

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The AAI is yet to issue shares to the government in lieu of the equity infusion worth Rs 656.56 crore made over the years. The matter came to the notice of the ministry last year during discussions over share buy back by profit making public sector enterprises.

Subsequently, officials of the ministries of finance, corporate affairs and civil aviation held discussions on corporatisation of AAI and legal opinion was also obtained on share issuance corresponding to the capital infusion.
"The finance ministry has written to AAI for issuing shares in lieu of the paid-up capital of Rs 656.56 crore infused by the Government," the sources told PTI.

Once the issuance of shares to the government is sorted out, steps would be initiated for converting the AAI into a company under the Companies Act. After conversion, the government can decide on divestment of equity, share buyback or listing of the AAI on the bourses.

Sources said the issue of corporatisation of AAI will be taken up by the new government, which is scheduled to assume office later in the month.

In last fiscal, AAI had transferred the entire profit after tax (PAT) for 2017-18 fiscal of Rs 2,800 crore to the government as dividend. Earlier, it used to transfer only 30 per cent of PAT as dividend to the government.

Capital restructuring policy of the finance ministry requires public sector enterprises to pay maximum dividend to the government. Hence last fiscal, AAI was asked to transfer its entire profit of 2017-18 to the exchequer as dividend.

AAI, as per its website, is responsible for creating, upgrading, maintaining and managing civil aviation infrastructure both on the ground and air space in the country. It manages 125 airports, which include 18 international airport, 7 customs airports, 78 domestic airports and 26 civil enclaves at Defense airfields.

In the current fiscal, the government has set a disinvestment target of Rs 90,000 crore. This is higher than Rs 84,972 crore mopped up in 2018-19 fiscal, which include Rs 10,000 crore from share buy back by CPSEs.