Yesterday entire aviation world was stunned & surprised by a story broken by a very dear friend Anurag Kotoky on twitter.
At 2.57 PM yesterday he tweeted
"FIPB to consider @IndiGo6E (InterGlobe Aviation) FDI proposal on August 1."
This was later confirmed by FIPB also as point 39,in additional agenda of FIPB meeting listed for August 1,as following:-
M/s InterGlobe Aviation Limited, New Delhi (No. 90/2014-FC.I)
[MoCA, DIPP, DEA]
Now most interesting part is, is Interglobe Enterprise seeking a nod for a FDI approval in to Indigo Airlines or seeking a permission to dilute its 48% stake held via a foreign registered firm?
If later is the case, then when foreign stake FIPB nod was not sought when it happened (2005) then why a FIPB approval is now needed to dilute that stake for upcoming IPO?
Did IndiGo6E had a foreign investment (Via Caelum Investments, remember it doesn't qualify as a OCB and hence it is a FDI) till now without a FIPB approval?
If this is the case, then isn't this defies the then, 2005 Law of India?
If it’s true, Subramanian Swamy will definitely move court, as was buzz, also mentioned in my blog post last week.
Or a 3rd scenario can be, it’s just to give an undertaking to the government that the foreign stake in the company will not exceed 49% even after the IPO planned by the company as mentioned in today ET"s story.
This story also quotes Ramesh Vaidyanathan, managing partner of law firm Advaya Legal who says
"There is a foreign investment element involved in this,
"There could be a potential strategic investor lurking somewhere," he said.
"FIPB does not give any clarification on hypothetical scenario. You have to go with a definitive proposal," Vaidyanathan added.
Now most interesting point here is,
What is this Foreign Investment in Indigo Airlines that is been referred here.
Let’s talk about ownership details of Indigo Airlines, which were always kept under wraps until 2012, when another very dear friend Tushar Srivastava broke a story in Hindustan Times on ownership of Indigo Airlines on 11 March.
Pic Credits:HT from the above mentioned story.
Indigo Airlines is jointly owned by US-based firm Caelum Investments, which is is owned by Rakesh Gangwal, who is based in Virginia & Interglobe Enterprises.
Caelum Investments (a foreign registered firm) holds 48% stake in Indigo Airlines, which was not in accordance of the then law of 2005, when Indigo Airlines was established, till Government of India changed its policy on FDI in September,2012.
Calling Caelum Investments a OCB (Over seas Corporate body) also doesn't save the skin because an NRI (Like Rakesh Gangwal or Naresh Goyal) are permitted to have a 100% ownership in a foreign registered company as Caelum Investments or Tail Winds(as was in case of Jet Airways parent company),but any such company can"t have an investment in a 3 rd company, say an airline operating out of India, as in case of Indigo & Jet Airways, until September 2012,when Government of India changed its FDI Policy in aviation.
This was prohibited by law till then.
There are many news reports in the past, which questions about ownership of Jet Airways like:-
CLEAR AIR TURBULENCE
NETWORKED OPERATIONS
Jet's Goyal owns 18 firms apart from Tail Winds
Government of India could not trace the owner of Jet Airways
IndiGo's parent company Interglobe Enterprises owns 51.12%. Kapil Bhatia, executive chairman, Interglobe Enterprises, his son, Rahul, Gangwal's wife Shobha and sister Asha Mukherjee hold the remaining stake of 0.88%.
Indigo Airlines would also been in trouble for a 48% stake being owned by a US based firm, if Government of India, had not changed its policy on FDI.
But few questions still remain and we will get their answers after Aug 1 meeting of FIPB is concluded & we will come to know that whether Interglobe Enterprises was seeking a FIPB nod for FDI into Indigo Airlines or whether they wanted to assure Government of India that a cap of 49% FDI won’t be breached even after an IPO is floated or they just wanted to have a clarification from FIPB on its foreign ownership, which seems difficult as FIPB is a approval body which gives FDI approval & not a regulator like SEBI which gives directions/suggestions/clarifications.
Till Aug 1, rumor mills will keep buzzing & there will be lot many new speculations regarding the same, enjoy the buzz till then,
But one thing I can say very surely,
There will be very interesting days ahead in Indian Aviation,
Air Asia has started operations on June 12 & announced two new routes on Thursday to Chandigarh & Jaipu from Bangalore, and will be getting 5 Airbus 320’s by November,2014.
Tata Singapore Airlines’s first bird Airbus 320 Sharklets VT-TTB MSN 6223,had its Test Flight & was spotted by XFW Spotters painted all white,awaiting brand announcement of the new airline (Taj Air/Taj Airways; may be) & is expected in late August or early September, which will be followed by a proving flight, followed by an AOP from DGCA.
They plan to commence operations by Mid October,2014.
6 pending NOC's were cleared by Ministry of Civil Aviation to start new regional/pan India airlines.
On hiring front, Indigo is badly short of Pilots & will be having another exam to hire Pilots, post Diwali (23 Oct 2014).
Also Jet Airways is thinking on similar lines & may give us a good news soon.
Also Spice Jet is planning another exam,but only selective people will be called for it,as its not possible,due infrastructure limitations to conduct an online exam for all employment seeking CPL holders in India,which are into thousands & its rumored,they may ask 50 thousand as fees to appear in the exam.
If sources are to be believed, four files for approval of vacancy were pending with Rohin Nandan, CMD, Air India who will serve August 8 as his last day in office & in all probability his term won’t be extended.
Out of these four, Air India Cabin Crew hiring file is already approved & its ad has also been floated for 225 vacancies.
Air India Express 737 Type Rated is also expected by September, subject to file’s approval & I have just heard, while writing the blog, Air India 320 Type Rated vacancy of 40 has been approved & will come latest by October, This info couldn’t be cross checked at the time of publishing this blog, as there was no time to check on this. But yes, a 320 Type Rated file was also awaiting approval from CMD & 320 Type Rated vacancy will come, subject to file’s approval.
Go Air may have a 320 Type Rated exam in as early as September; if it happens then we may have one more exam in Go Air in this year only.
Air Asia India, as its expanding & will be getting 4 more Airbus 320 by November, they may have a 320 Type Rated exam around October, as mentioned by head of flight operations, in public domain on a social media site.
A big Thank You to all of you for your patience & time devoted in reading this.
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Follow us on Twitter: By clicking here.
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At 2.57 PM yesterday he tweeted
"FIPB to consider @IndiGo6E (InterGlobe Aviation) FDI proposal on August 1."
This was later confirmed by FIPB also as point 39,in additional agenda of FIPB meeting listed for August 1,as following:-
M/s InterGlobe Aviation Limited, New Delhi (No. 90/2014-FC.I)
[MoCA, DIPP, DEA]
Now most interesting part is, is Interglobe Enterprise seeking a nod for a FDI approval in to Indigo Airlines or seeking a permission to dilute its 48% stake held via a foreign registered firm?
If later is the case, then when foreign stake FIPB nod was not sought when it happened (2005) then why a FIPB approval is now needed to dilute that stake for upcoming IPO?
Did IndiGo6E had a foreign investment (Via Caelum Investments, remember it doesn't qualify as a OCB and hence it is a FDI) till now without a FIPB approval?
If this is the case, then isn't this defies the then, 2005 Law of India?
If it’s true, Subramanian Swamy will definitely move court, as was buzz, also mentioned in my blog post last week.
Or a 3rd scenario can be, it’s just to give an undertaking to the government that the foreign stake in the company will not exceed 49% even after the IPO planned by the company as mentioned in today ET"s story.
This story also quotes Ramesh Vaidyanathan, managing partner of law firm Advaya Legal who says
"There is a foreign investment element involved in this,
"There could be a potential strategic investor lurking somewhere," he said.
"FIPB does not give any clarification on hypothetical scenario. You have to go with a definitive proposal," Vaidyanathan added.
Now most interesting point here is,
What is this Foreign Investment in Indigo Airlines that is been referred here.
Let’s talk about ownership details of Indigo Airlines, which were always kept under wraps until 2012, when another very dear friend Tushar Srivastava broke a story in Hindustan Times on ownership of Indigo Airlines on 11 March.
Indigo Airlines is jointly owned by US-based firm Caelum Investments, which is is owned by Rakesh Gangwal, who is based in Virginia & Interglobe Enterprises.
Caelum Investments (a foreign registered firm) holds 48% stake in Indigo Airlines, which was not in accordance of the then law of 2005, when Indigo Airlines was established, till Government of India changed its policy on FDI in September,2012.
Calling Caelum Investments a OCB (Over seas Corporate body) also doesn't save the skin because an NRI (Like Rakesh Gangwal or Naresh Goyal) are permitted to have a 100% ownership in a foreign registered company as Caelum Investments or Tail Winds(as was in case of Jet Airways parent company),but any such company can"t have an investment in a 3 rd company, say an airline operating out of India, as in case of Indigo & Jet Airways, until September 2012,when Government of India changed its FDI Policy in aviation.
This was prohibited by law till then.
There are many news reports in the past, which questions about ownership of Jet Airways like:-
CLEAR AIR TURBULENCE
NETWORKED OPERATIONS
Jet's Goyal owns 18 firms apart from Tail Winds
Government of India could not trace the owner of Jet Airways
IndiGo's parent company Interglobe Enterprises owns 51.12%. Kapil Bhatia, executive chairman, Interglobe Enterprises, his son, Rahul, Gangwal's wife Shobha and sister Asha Mukherjee hold the remaining stake of 0.88%.
Indigo Airlines would also been in trouble for a 48% stake being owned by a US based firm, if Government of India, had not changed its policy on FDI.
But few questions still remain and we will get their answers after Aug 1 meeting of FIPB is concluded & we will come to know that whether Interglobe Enterprises was seeking a FIPB nod for FDI into Indigo Airlines or whether they wanted to assure Government of India that a cap of 49% FDI won’t be breached even after an IPO is floated or they just wanted to have a clarification from FIPB on its foreign ownership, which seems difficult as FIPB is a approval body which gives FDI approval & not a regulator like SEBI which gives directions/suggestions/clarifications.
Till Aug 1, rumor mills will keep buzzing & there will be lot many new speculations regarding the same, enjoy the buzz till then,
But one thing I can say very surely,
There will be very interesting days ahead in Indian Aviation,
Air Asia has started operations on June 12 & announced two new routes on Thursday to Chandigarh & Jaipu from Bangalore, and will be getting 5 Airbus 320’s by November,2014.
Tata Singapore Airlines’s first bird Airbus 320 Sharklets VT-TTB MSN 6223,had its Test Flight & was spotted by XFW Spotters painted all white,awaiting brand announcement of the new airline (Taj Air/Taj Airways; may be) & is expected in late August or early September, which will be followed by a proving flight, followed by an AOP from DGCA.
Pic Credit: XFW Blog
They plan to commence operations by Mid October,2014.
6 pending NOC's were cleared by Ministry of Civil Aviation to start new regional/pan India airlines.
On hiring front, Indigo is badly short of Pilots & will be having another exam to hire Pilots, post Diwali (23 Oct 2014).
Also Jet Airways is thinking on similar lines & may give us a good news soon.
Also Spice Jet is planning another exam,but only selective people will be called for it,as its not possible,due infrastructure limitations to conduct an online exam for all employment seeking CPL holders in India,which are into thousands & its rumored,they may ask 50 thousand as fees to appear in the exam.
If sources are to be believed, four files for approval of vacancy were pending with Rohin Nandan, CMD, Air India who will serve August 8 as his last day in office & in all probability his term won’t be extended.
Out of these four, Air India Cabin Crew hiring file is already approved & its ad has also been floated for 225 vacancies.
Air India Express 737 Type Rated is also expected by September, subject to file’s approval & I have just heard, while writing the blog, Air India 320 Type Rated vacancy of 40 has been approved & will come latest by October, This info couldn’t be cross checked at the time of publishing this blog, as there was no time to check on this. But yes, a 320 Type Rated file was also awaiting approval from CMD & 320 Type Rated vacancy will come, subject to file’s approval.
Go Air may have a 320 Type Rated exam in as early as September; if it happens then we may have one more exam in Go Air in this year only.
Air Asia India, as its expanding & will be getting 4 more Airbus 320 by November, they may have a 320 Type Rated exam around October, as mentioned by head of flight operations, in public domain on a social media site.
A big Thank You to all of you for your patience & time devoted in reading this.
If you want to hear from us more often,then
Follow us on Twitter: By clicking here.
Like us on Facebook: By clicking here.
Love aditya.
