The Centre is accelerating plans to sell stakes in some of India’s biggest public sector companies, including Life Insurance Corporation of India (LIC), Hindustan Zinc and several state-owned banks, as it looks to cushion the impact of higher oil prices on government finances, reported Bloomberg.
The report said the government has identified eight companies for stake sales over the coming months as it seeks to raise additional resources while keeping its fiscal deficit under control.
Among the biggest planned transactions is a follow-on share sale in LIC, which could fetch the government up to Rs 10,000 crore. Another stake sale in Hindustan Zinc could raise around Rs 5,000 crore, Bloomberg reported, citing people familiar with the matter.
The move comes after the recent surge in global crude oil prices during the Iran-West Asia conflict put pressure on government finances.
Although oil prices have cooled in recent weeks as tensions eased and shipping through the Strait of Hormuz resumed, the government is looking to create additional fiscal room in case energy prices remain volatile, according to the report.
Officials overseeing the disinvestment programme have reportedly been holding weekly meetings with investment bankers to assess investor demand, work on pricing and finalise timelines for the planned share sales. More bankers are also being appointed to prepare additional state-run companies for future offerings.
Bloomberg reported that the government is also considering inviting fresh bids for the sale of a majority stake in IDBI Bank after an earlier attempt failed to attract sufficient buyer interest.
According to the report, the Centre may lower the reserve price for the transaction, with fresh bids expected to be restricted to those who participated in the previous round.
The planned stake sales could come at a time when investor appetite is already being tested.
Bloomberg noted that foreign investors pulled out nearly $29 billion from Indian equities during the first half of the year, contributing to a decline in benchmark indices. At the same time, state-run companies could also face competition for investor money from upcoming mega public offerings such as Jio Platforms and the National Stock Exchange (NSE).
However, the government appears encouraged by the strong response to recent stake sales in Coal India and NHPC.
According to Bloomberg, India has already raised nearly $2 billion through share sales in the April-June quarter as part of its Rs 80,000 crore disinvestment target for FY27. The amount has already exceeded the total proceeds from disinvestment in each of the previous three financial years, highlighting the renewed momentum in the government’s asset monetisation programme.
While there has been no official confirmation from the Finance Ministry on the reported plans, the stake sale programme, if implemented, would mark one of the government’s biggest disinvestment pushes in recent years.