The Maharashtra government has purchased the iconic Air India building in Mumbai from Air India Assets Holding Limited (AIAHL) for Rs 1,601 crore. The move is expected to help solve the long-standing space shortage faced by several state government departments.
The state government plans to shift a number of its offices to the Air India building, many of which are currently functioning from rented premises across Mumbai. The Public Works Department (PWD) will carry out internal renovation work and aims to make the building ready for use within a year.
With the acquisition, the government will get around 46,470 square metres of office space close to the Mantralaya, the state’s administrative headquarters.
The Mantralaya and its annexe have been facing a shortage of office space for several years. The problem became more serious after a major fire at the Mantralaya complex in 2012, which forced several departments to move out.
Since then, many government offices have been operating from different locations across Mumbai, some far from the state secretariat. The government has also been paying significant rent for these offices.
The Centre approved the sale of the Air India building in 2024. Following this, the Maharashtra Cabinet gave its approval for the acquisition in November 2025.
The purchase is expected to bring several departments closer to the Mantralaya and improve administrative coordination.
Air India had decided to sell the building in 2018 as part of its asset monetisation plan after shifting its headquarters to New Delhi.
At that time, Air India had sought Rs 2,000 crore for the property. The Maharashtra government had offered Rs 1,400 crore. Other bidders included the Jawaharlal Nehru Port Authority, which offered Rs 1,375 crore, and the Life Insurance Corporation of India (LIC), which offered Rs 1,200 crore.
After the Eknath Shinde-led government came to power in Maharashtra, the state decided to increase its offer to Rs 1,601 crore. It also agreed to waive nearly Rs 300 crore in dues, mainly related to unrealised income and interest on the leased land.
In 2022, then Deputy Chief Minister Devendra Fadnavis had met Union Civil Aviation Minister Jyotiraditya Scindia and requested that preference be given to the Maharashtra government in the sale of the building.
With the deal now completed, the state government expects the Air India building to play a key role in addressing its office space requirements in south Mumbai.