With Air India receiving final bids for privatization on September 15th, everyone is curious to know who will emerge as the likely future owner of the carrier. Initially, when news of the government preparing to sell the national airline started floating around, multiple players showed interest. However, for quite some time, the battle has been between just two – the Tata Group and Ajay Singh of SpiceJet.
The Tata Group
One of India’s largest conglomerates, the Tata Group’s brand needs little introduction in the country. Often called the “salt to software” conglomerate, the group has its roots in many diverse sectors – from jewelry and apparel to steel, automobiles, and even direct-to-home TV services.
The company was founded in 1868 as a private trading firm by entrepreneur Jamsetji Nusserwanji Tata. Over the decades, it has snowballed into a gigantic organization owning several companies across multiple sectors such as energy, engineering and technology, consumer goods, and chemicals.
The Tatas are also known for creating some of the most well-known luxury brands in India. It commissioned the Taj Mahal Palace & Tower in 1902 – the first luxury hotel in India. In 1932, JRD Tata – an aviator himself – founded Tata Airlines (present-day Air India), which at one point was one of the most luxurious and reputable airlines in the world.
The organization is no stranger to high-profile acquisitions and large buyouts – Tata Tea acquired Tetley, Tata Chemicals acquired Brunner Mond, Tata Steel bought the Corus Group, and Tata Motors bought Jaguar. It’s no surprise they’re considered the frontrunner for Air India by many.
The Tata Group is also the majority shareholder in AirAsia India and Vistara, and there has been much speculation about what route the group might take if it takes over Air India. Singapore Airlines, Tata’s partner in Vistara, has shown reluctance in the past about the company’s ambitions for Air India but is now said to be open to the idea. According to the Economic Times, the group could even club all three airlines together under a single entity. Of course, all of this depends on the final outcome as another bidder is also eyeing the carrier.
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The Indian businessman today is mainly known for being the owner and co-founder of India’s LCC SpiceJet. But this second bidder has also donned many hats throughout his professional life.
A first-generation entrepreneur, Ajay Singh is an engineering graduate from IIT (Indian Institutes of Technology) Delhi and holds an MBA in Finance from Cornell University. At Cornell, he was the president of the university’s India Association.
In the past, he has served as an OSD (officer on special duty) during the previous NDA government for the IT, Telecom, and Information and Broadcasting ministries. He also played a significant role in launching DD Sports, a government-owned sports broadcasting channel. In the late 90s, Singh helped the BJP government revamp Delhi Transport Corporation’s bus service and assisted the party ahead of the 2014 national election.
In 2016, he was also appointed the president of the Boxing Federation of India, a post he continues to hold following successful re-election this year.
In 2004, Singh co-founded SpiceJet by acquiring the AOC of a former private carrier called Modiluft. He, however, sold the majority stake of SpiceJet to media baron Kalanithi Maran in 2010, only to come back in 2015 when the airline was steeped in losses. He repurchased the majority shares, and Singh and his wife were appointed as directors of the company.
Singh is bidding for Air India in a personal capacity. In fact, as reported by The Telegraph India, just a few days before the final bid, Singh was looking to invite partners in a special purpose vehicle (SPV) after creating a $1 billion war chest to bid for the carrier.
The government is keen on closing the deal for Air India, hopefully by year-end, and we’ll soon get to know the winning bid. Many believe that this deal is Tatas’ to lose, but until the final results are declared, Ajay Singh cannot be ruled out as well.