Privatization of Pawan Hans a 37 year old company to invigorate market for helicopter services

Like several other government-owned entities, Pawan Hans has played a leading role in providing transportation and cargo services to the state-owned Oil and Natural Gas Corp.

The privatisation of Pawan Hans will go a long way in providing a much-needed boost to India's diminutive civil helicopter industry by enhancing its competitiveness as well expanding the market, industry veterans have said. On Friday, the Department of Investment and Public Asset Management (DIPAM) declared the consortium of Star9 Mobility as the winning bidder for the 37-year-old company after three previous attempts at its divestment were unsuccessful.

The Star9 Consortium – comprising Big Charter, Maharaja Aviation and the Cayman Islands-registered Almas Global Opportunity Fund – made a bid of Rs 211.14 crore for Pawan Hans. As per procedure, the reserve price for the sale was fixed at Rs 199.92 crore, based on a valuation carried out by SBI Market Capital and RBSA Advisors.

Welcoming the move, the father of the country's low-cost carrier (LCC) revolution and founder of helicopter charters firm Deccan Aviation, Captain GR Gopinath, said, "Any privatisation is a good move as long as it doesn't lead to a monopoly or cartelisation. Thus, the privatisation of Pawan Hans is good for the consumer and the country as it will help in expanding the market and increase competition."

Like several other government-owned entities, Pawan Hans has played a leading role in providing transportation and cargo services to the state-owned Oil and Natural Gas Corp. (ONGC) for its offshore operations, inter-island connectivity, helicopter tourism and troopers deployed in Left Wing Extremism (LWE) infested areas since launch in 1985. However, its privatisation was necessitated with market dynamics evolving.

"The privatisation of Pawan Hans is a good move by the government. The company needed new synergies and, with this development, a higher level of competitiveness and better procedures will come into being for the rotary-wing segment," industry veteran Pushpinder Oberai observed. "This will also provide a boost to the segment, which is presently a minuscule part of India's aviation industry. It remains to be seen how the winning consortium moves ahead with turning around the company to deliver a strong product for the good of the industry and the country."

As the deal for Pawan Hans' sell-off moves to the final stage, including the issuance of the Letter of Award (LoA), inking of the Share Purchase Agreement (SPA) and closing of the transaction, experts said it would help in reinvigorating the industry.