Air India wants to go public for a shocking reason!

Why do companies get listed on stock exchanges? Generally, the purpose for raising money is to fund future expansion plans and to create liquidity by facilitating trading in the share market.

But what if a company issues an initial public offering (IPO) just so that it can facilitate employee stock options for its employees? And what if that company is none other than debt-ridden loss-making public sector firm Air India?

So far the government has been supporting this ailing national carrier with tax payers' money. But if the recommendations of the pay parity report, also known as Dharmadhikari report, are implemented Air India could soon be listed on the stock exchanges. The report recommends listing of the state-owned firm so as to facilitate employee stock options. That too, as part of voluntary retirement scheme (VRS) for probably 7,000 of its 'voluntary retirees'.

In theory, this novel idea may seem to be a quick fix to Air India's ongoing financial constraints. But can the government allure investors to buy shares of Air India? For one, the sentiments in the IPO market are not too encouraging. Secondly, investors have already burned their fingers on other aviation stocks. And given Air India's abysmal financial health, inefficient operations and excessive government interference, the chances of a successful IPO are very bleak.