What went wrong? Who messed it up? The day after Air India disinvestment failed to take off, government officials across ministries and departments spent hours trying to find an answer to these questions. Many of those spearheading the sale put the blame on the dealmakers and advisors for failing to attract potential bidders, others pointed at the industry for the fiasco.
But after long meetings, including in the Prime Minister’s Office (PMO) on Friday, the consensus by late evening was that potential bidders didn’t show any animal spirit or any spirit at all. A top government official told Business Standard that ‘’inadequacy of risk-taking appetite in the industry’’ resulted in the disinvestment process failing. According to him, nothing else or nobody else should be blamed for not receiving even a single expression of interest for buying a controlling stake in the national carrier. While businesses had shown an interest in Air India earlier, they backed out as the process progressed.
A source described the morning after as “a time of confusion and mixed feelings’’. This saga was no different, he said. So, officials dealing with the issue were heard putting the blame on ineffective communication strategy during the process for not getting bidders. “The terms of sale were very liberal, but there was no buzz created about such an important strategic sale. The failure was in terms of communicating them to potential bidders,” a senior government official said.
According to guidelines of DIPAM, the government cannot directly communicate with prospective buyers and it is the responsibility of transaction advisor to communicate the terms and generate an interest among prospective buyers. “That the seller (in this case the government) cannot directly communicate with suitors is a big hurdle, there is a need to relook at this aspect,” a second official said.
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