A Red Carpet for the Maharajah!

ON 8 OCTOBER, WHILE MOST of India was immersed in autumn festivals, an afternoon Press conference brought to an end media speculation about Tata Sons winning the bid for a 100 per cent stake in India’s national carrier.

- Srinath Sridharan

Tata Sons outbid a consortium led by SpiceJet’s CMD Ajay Singh, who had bid Rs 15,100 crore to acquire Air India. The Tata Group’s wholly-owned subsidiary Talace Pvt. Ltd. put an enterprise value bid of Rs 18,000 crore, with debt to be retained at Rs 15,300 crore.

This writer, though, had no doubt that Tata Sons would be the new incumbent-owner of Air India. The decision process already had the approval of the special panel led by Union Home Minister Amit Shah and needed ratification by the Union Cabinet. In the Air India disinvestment deal, the winner not only gets 100 per cent stake in Air India but also 100 per cent of Air India Express and 50 per cent of Air India SATS Airport Services. The Tatas already have an airline joint venture (JV) with Singapore Airlines – Vistara, as well as AirAsia India (the erstwhile JV with AirAsia for a low-cost carrier business).

The Tatas were also the potential bidders when the Government of India (GoI) ran a process to sell its stake in Air India in 2001 and 2017. A key difference this time around was the focus on a quicker deal closure and on making the transaction fructify.

Home Coming or Sweet Revenge?