Centre postpones airline IPO

New Delhi: The Centre has decided not to proceed with an IPO for the national carrier till the company formed by merging Air India and Indian Airlines is able to deliver a good financial performance and attract a good price.
While IA has been making losses for years, AI has not been able to touch the record profit level of Rs 333 crore of 1992. In the past five years, the Maharaja has been making profits in the range of Rs 110 crore and Rs 14 crore on an equity base of Rs 153 crore.
"Having a Rs 10 share going for Rs 9 or 8 in an IPO for the national carrier is not acceptable to the owner, the government. The IPO will be done at a time when the airline is able to fetch a premium. Although going to market would have forced fiscal discipline on the airline, we are going to wait," said an official.
So in the interim, the government has decided to offer 5% to 7% equity to employees as ESOPs. The ministry is going to move for Cabinet approval for this in coming weeks.
17/09/07 Saurabh Sinha/Times of India

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Categories: Air India - International Sep 2007, Air India Domestic Sep 2007, NACL Sep 2007