Decision on National Aviation Company of India IPO only after six months
16 Oct 2007
Patel said the decision on the IPO as well as on granting stock options to NACIL employees would be taken keeping in view the market environment. "We will review the merger after six months and then take a call on the IPO," he said.
The minister''s comments come on the background of officials from his ministry indicating that Accenture, the consultant that advised the government on the merger of the two state carriers, has already been asked to work out valuations and the different possible methods by which equity dilution can be achieved. The study could take up to five or six months to complete.
NACIL officials said the company is looking at revenues of $4 billion this fiscal against $3.5 billion in 2006-07, but it is not clear whether the merged entity would be able to declare a profit. Both Indian and Air India were making losses before the merger.
If NACIL is able to report good numbers for 2007-08, it would play a crucial role in the timing and the size of the proposed IPO, since a profitable entity would be able to command much better valuations.
NACIL
managing director V Thulasidas had earlier indicated that the government might
offload up to a 15 per cent stake through the IPO, but no such decision has been
taken to date.
