The government is now open to the idea of listing Air India Ltd. as it struggles to find ways to sell its stake in the debt-laden carrier after one failed attempt.
Selling shares through an initial public offering will help shore up cash to fund the operations of the state-owned airline, a government official said at the sidelines of an event in New Delhi on Wednesday. A Group of Ministers will meet shortly to consider possible options for a stake sale, the official said, adding that the idea of foreign ownership of Air India is not on the cards.
The government’s proposal to sell 76 percent stake in the loss-making national carrier received close to 160 queries from potential buyers last month but none of them translated into actual bids by the time the deadline expired on May 31. Along with the Air India stake, a potential buyer would also have to buy 100 percent in its low-cost arm Air India Express and 50 percent in the ground handling unit and take on more than half of the Rs 54,000 crore debt.
With this plan falling through, Prime Minister Narendra Modi’s administration is now re-examining its privatisation process, including the clause that required the Centre to retain a 24 percent stake in the carrier, Bloomberg reported yesterday quoting Economic Affairs Secretary Subhash Chandra Garg. The government doesn’t intend to insist on keeping a minority stake, he had said.