Air India's IPO only after integration but ESOPs may precede

MUMBAI: National carrier Air India is unlikely to launch an initial public offer before 2009 until full integration of the two merged state-run airlines, but it may give stock options to employees ahead of the issue.

"Our consultant, Accenture, has given a 12-18 month road-map for full integration of the merged identity and an IPO is unlikely to take place before then," Air India's Chairman, V Thulasidas, told here.

However, a proposal to offer stock options to its 34,000 employees may fructify ahead of the IPO and a concept paper for this purpose has already been submitted to Civil Aviation Ministry, he said.

The two airlines, Air India and Indian, were merged in July-August this year and 12-18-months for full integration would mean that an IPO would not take place before mid-2009, Thulasidas hinted.
 
If the recommendations of the concept document are accepted, it is quite likely that ESOP could be given before the IPO, he indicated.

As per the proposal, the newly-created holding company for the merged identity, National Aviation Company of India Ltd (NACIL), is expected to offer 5 per cent of equity to its employees. In the IPO, the proposal is to off-load 10-15 per cent to raise funds for expansion.