The outcome comes as little surprise as the government had bundled the sale of its 76 percent stake with sale of Air India’s stake in some of its subsidiaries
The government’s offer to sell up to 76 percent stake in Air India has got no bidders, officials familiar with the development told Moneycontrol. The deadline to submit the bids ended today.
The outcome comes as little surprise as the government had bundled the sale of its 76 percent stake with sale of Air India’s stake in some of its subsidiaries, a scenario that was not expected to find many takers as its the airline’s international routes that are most coveted and not its loss-making domestic operations.
Along with the sale of government’s 76 percent stake, the government had also put on block Air India’s 100% stake in its subsidiary Air India Express and a 50% stake in Air India SATS airport services, a ground-handling service company formed in partnership with Singapore-based SATS. The three sales were combined as one.
Another limiting factor that must have kept away potential bidders was the government capping the stake foreign entities could hold in the airline at 49 percent. With that ceiling at 49 percent and the government itself choosing to retain 24 percent in the airline, few would have been interested in the bid. As it turns out, none was.
InterGlobe Aviation, the company behind India’s largest airline IndiGo, had already pulled itself out of the race after initially officially expressing an intent. Tata Sons too had initially shown its intent to bid for the airline but never made any official statement on it.
While there was no word from the government on whether it would float the offer again with revised conditions, there is every likelihood the government may shelve the disinvestment or put the sale on the backburner, as a face-saving stance.As on December 31, AI alone had 11,214 permanent staff excluding 2,913 contractual and 2,155 casual. There were 2,661 employees on deputation. With general elections less than a year away, the government may well shelve the exercise as the noise around a privatisation may only hurt its prospects at the hustings, given the fear of job losses that may happen once a private entity takes over the state-owned carrier.