Entities having sufficient net worth and the ability to run Air India (AI) can bid for 76 per cent stake in the national carrier, DIPAM Secretary Neeraj Gupta said on Thursday.
Prodding venture capital funds to participate in the PSU disinvestment programme, Gupta said such funds may tie up with domestic companies to bid for state-run assets.
“We are not looking only for an airline to takeover Air India, we have given a small carve out for airlines on how domestic airlines will be treated in terms of eligibility in a consortium but otherwise anybody who has net worth and funds can bid for Air India,” said Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said at an ASSOCHAM Annual India Investment Conference.
“In all these disinvestment exercises also, we have kept them technically neutral, finance is the main criteria and your capability to takeover and run such an asset in financial terms is the main criteria,” he added. He also said that the Union Government had received lot of queries from airlines and non-airlines for proposed
divestment of the national carrier.
Earlier, Gupta also said that there is a thought that VCs cannot make investment in such privatisation or strategic disinvestment area which is not correct. “You individually may not be but if you see the expression of interest being invited in these cases, the only criteria is net worth.” Talking about the huge potential for growth in the PE and VC sector, the DIPAM secretary highlighted that from 2009 to 2016 the PEs and VCs have grown as a percentage of GDP (gross domestic product), besides both size and volume of the deals have also grown.
Adding that government had addressed lot of issues flagged by the PEs and VCs, Gupta said, “I am not saying all the issues could have been addressed and there may be more expectations on tax and incentive side but we have to always remember that when we provide a very-very attractive, sweet carve-out for one set of investors
it has the potential of be-
ing misused and tax is definitely the basis on which
we can maintain financial discipline.”