A Business Standard Report suggests that Government may completely exit Air India by selling its residual stakes to Life Insurance Corporation of India (LIC) and other financial institutions.
As per the plans, 76 percent of equity would be sold in the national carrier, 50 percent in ground handling and AISATS hospitality firm, while 100 percent would go in its subsidiary Air India Express. This move will make things clear and do away with investor’s concerns over the matter of government’s intrusion in Air India operations.
A senior official reported that center is keen on beginning discussions with LIC and other insurance companies in selling out its residual stake of Air India after employee stock ownership plans (ESOPs) are given out to permanent employees.
Many state-owned insurance companies including LIC are stakeholders of many blue-chip companies. Insurance Regulatory and Development Authority of India (IRDAI) allows insurance companies to have 15 percent stakes in a company.
“After a valuation for Air India will be reached, prices shall be discovered post which companies would be approached to buy stakes at that price.”, said an official involved with the matter.
It is expected that once Air India comes under the private umbrella, it would turn out lucrative for companies to buy its shares, which would be offloaded during public listing.