Higher valuation seen for merged A-I, Indian co

New Delhi: The government is in the process of realigning the functions of the consultants for Air-India and Indian. The two airlines had hired consultants as the government was keen to launch separate IPOs for both of them.
However, after the merger plan got approval from the highest quarters, it has been decided to launch an IPO for the merged entity.
The feeling within the government is that the value the merged entity can obtain would be far greater than the sum of the values of the individual companies. “It will not be just one plus one. It will be far more than that due to synergy of operations,” A-I chairman-cum-managing director V Thulasidas said. When asked about the impact of the merger, he said it would result in significant savings in terms of expenditure due to route rationalisation.
The ministry is so keen on the merger that it has been incorporated into the civil aviation policy draft.
15/05/06 G Ganapathy Subramaniam/Economic Times

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