The government on Friday finalised the sale of national carrier Air India to the Tata Group for their winning bid of Rs 18,000 crore.
The debt-laden airline's ownership now goes back to the salt-to-software conglomerate, which founded it nearly 90 years ago.
The national carrier has been incurring losses ever since its merger with Indian Airlines in 2007. The secretary of Department of Investment and Public Asset Management (Dipam) said its losses were around Rs 20 crore per day.
Thus, the government was left with no option but to sell its stake in the carrier. However, it took over two decades and as many as three attempts for Air India to finally change hands.
What is it that clicked this time around? Here's a deeper look at the disinvestment process over the years ...
2000-01: NDA govt tries to sell 40% stake
As part of its broader privatisation and disinvestment push, in 2000-01, the NDA government under Atal Bihari Vajpayee tried to sell a minority stake (40 per cent) in Air India.
The Singapore Airlines along with the Tata Group showed interest in buying the stake. However, they eventually pulled out mainly due to opposition to privatisation by trade unions.
This derailed the disinvestment plan.
Financial restructuring plan in 2012
In order to mitigate the losses incurred by the airline, a turnaround plan (TAP) as well as a financial restructuring plan (FRP) were approved for Air India by the previous UPA regime in 2012.
March 2018: Govt invites EoIs for selling 76% stake
After the Cabinet Committee on Economic Affairs (CCEA) gave in-principle approval for strategic disinvestment of Air India and its five subsidiaries, the Centre invited expressions of interest (EoIs) for buying majority (76 per cent) of its stake in the airline.
The winner was required to take over nearly 70 per cent of the debts of the airline which then amounted to about Rs 33,392 crore.
It also included 100 per cent stake in Air India Express — the carrier's low-cost subsidiary — and 50 per cent in ground handling arm AISATS.
However, no bids were received till the last date of submission in May 2018. The main reason for this was that the Centre was retaining a part of the airline's control with itself and not selling 100 per cent stake. Besides, the debts that were required to be taken over by the bidder was too high.
January 2020: Govt offers 100% stake in Air India
The Centre invited fresh EoIs from interested bidders to acquire the airline in January 2020.
This time, however, it was offering the entire 100 per cent stake in the flagship carrier.
The deal also included 100 per cent stake in Air India Express and 50 per cent in ground handling arm AISATS.
After failing to receive any bids the last time around, the Centre this time lowered the amount of debt which the buyer would need to takeover.
Eventually, of the airline's total debt of Rs 60,074 crore as of March 31, 2019, the new EoI said that the buyer would be required to absorb Rs 23,286.5 crore.
October 2020: Terms of deal relaxed further
The terms of the deal for potential buyers were relaxed further by the Centre.
This time, flexibility was given to investors to decide on the amount of Air India debt they want to absorb.
The government received multiple bids but the deadline was extended five times until December 14, 2020. The Covid-19 pandemic also delayed the process.
April 2021: Financial bids received
Government started inviting financial bids for Air India and fixed September 15 as the last date to put in the bids.
September 2021: Tatas, SpiceJet promoter Ajay Singh make bids
The transaction saw keen competition with 7 EOIs being received in December 2020.
However, the government had to disqualify five of the bidders as they could not meet the requirements set out in the PIM/EOI, even after allowing them an opportunity for clarification.
Two sealed bids were received on the due date along with non-financial bid documents and bid security from the two qualified bidders.
One belonged to M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd. The other one was a consortium led by SpiceJet promoter Ajay Singh.