Post sell-off, govt. likely to hold around 26% stake in Air India

TIL Desk/Business/New Delhi/ India may not fully privatise its beleaguered airline Air India. While policy think tank NITI Aayog had recommended a 100 per cent stake sale, the government may hold on to around a 26 per cent stake to be sold later. A final call, however, would be taken by the group of ministers looking into the divestment process.

Sources in the know of the development said the government believed privatisation would increase the airline’s efficiency and make it profitable, enriching the value of the remaining stake with the government.“The idea is to garner as much money as possible from the sale process.

“Having a private management will improve the operations and the airline will start showing profits, which will increase the value of the company. “Selling 26 per cent, say, after three years, may give more value to the government in terms of money,” said an official.

A second official confirmed that the government was contemplating keeping a minority stake, but insisted that it would like to give full independence to the new owner in running the airline. “Even if the government holds on to some stake, it will be ensured that there is a very nominal presence in the governing board. “Full authority will be given to the private player to operate the airline and there will be no interference in day-to-day operations,” the official said.