New Delhi: India’s asset sale campaign got off to a strong start, with the government realizing nearly a quarter of its ₹80,000-crore target for the ongoing financial year (FY27), two people aware of the matter said.
The government has raised ₹6,366.93 crore through land monetization via Infrastructure Investment Trusts (InvITs), while stake sales in Central Bank of India and Coal India fetched another ₹7,808.49 crore, the first of the two persons mentioned earlier said, citing the disinvestment receipts. Further, the Centre is estimated to have raised about ₹4,279 crore by selling a 6% stake in NHPC through the offer-for-sale (OFS) route, including the green shoe option to meet excess demand, the second person said. These asset sales add up to ₹18,454.42 crore, accounting for over 23% of disinvestment and asset monetization target for FY27.
The resource mobilization assumes significance at a time when India’s fiscal deficit surged to ₹3.62 trillion in April, nearly doubling from a year earlier, driven by a sharp decline in revenue receipts and a jump in expenditure during the first month of the ongoing financial year.
The April fiscal deficit—which reflects the gap between expenditure and revenue financed through borrowing—reached 21.4% of the ₹16.96 trillion budget target for FY27, according to the latest accounts released by the Controller General of Accounts (CGA).
Queries sent to the Department of Investment and Public Asset Management (DIPAM) secretary, spokespersons of the finance ministry, Central Bank of India, Coal India and NHPC remained unanswered till press time.
Groundwork done
According to experts, the groundwork for divestments had largely been completed in FY25 and FY26. However, the government did not accelerate stake sales earlier as strong revenue collections helped it meet, and in some cases, surpass its fiscal deficit targets.
“FY27 is a challenge for the government as the subsidy bill and pump-priming support requirements have increased owing to the Middle East conflict-related adverse impacts on crude oil prices, fertiliser prices and exports,” said Ranen Banerjee, partner and leader, economic advisory, PwC India.
“The demand growth is also muted and hence GST (goods and services tax) collection growth rate is also a challenge. The income of corporates and individuals will also be under stress in FY27, putting further stress on income tax collections. The proceeds from divestments, thus, become very important for the government in FY27 towards keeping the fiscal deficit under control. It is therefore pressing the pedal and rightfully so in this fiscal,” said Banerjee.
Others said that non-tax revenue, including asset sales, will be crucial to containing the fiscal deficit at 4.3% of GDP in FY27.
“Receipts from non-tax sources will play an important role in containing the fiscal deficit in FY27 which may otherwise face the pressure due to higher crude prices leading to higher petroleum sector-linked subsidies. In this context, receipts from disinvestment and asset monetization will play an important role,” said D.K. Srivastava, chief policy advisor, EY India.
“An active pursuit of meeting the budget disinvestment target would be welcome considering the current fiscal trends,” said Srivastava.
The government had garnered ₹16,885.56 crore from disinvestment in FY26, compared with ₹10,163.02 crore in the previous fiscal year, DIPAM data showed. Besides disinvestment receipts, ₹28,420.49 crore was raised through asset monetization in FY26. There were no such asset monetization receipts before FY26.
Starting with Central Bank
The government began its stake sale programme with the offer for sale of an 8.08% stake in Central Bank of India on 22 May , which was subscribed 2.35 times on the first day. It was followed by the sale of a 2% stake in Coal India on 27 May, where the issue was subscribed more than eight times, leading the government to exercise the green shoe option. NHPC became the third state-run company under the OFS programme, with a 6% stake offered for sale on 2 June. The issue received bids for 3.47 times the shares on offer. The government exercised the green shoe option in all three OFS.
The government fixed the floor price at ₹31 per share for Central Bank of India, ₹412 per share for Coal India and ₹71 per share for NHPC, offering discounts to prevailing market prices to attract investor interest.
Following the stake sale, the government’s shareholding in Central Bank of India declined to 81.19%, while its holding in Coal India fell to 61.13%. In NHPC, the government’s stake is expected to reduce to around 61.4%.
The government currently holds 6.77 billion shares in NHPC, representing a 67.4% stake in the company. Based on Wednesday’s closing price of ₹75.12 per share on the BSE, the government’s holding is valued at ₹50,857.34 crore, while NHPC’s total market capitalisation stands at ₹75,458.30 crore.
Following the OFS, the government holds 3.77 billion shares in Coal India, representing a 61.13% stake in the company. Based on the closing price of ₹472.65 per share, the value of the Centre’s holding stands at ₹1.78 trillion, while Coal India’s total market capitalisation is around ₹2.91 trillion.
Following the OFS, the government holds 7.35 billion shares in the Central Bank of India, representing an 81.19% stake in the lender. Based on the closing price of ₹30.30 per share, the value of the Centre’s holding stands at ₹22,266.80 crore, while the bank’s total market capitalisation is ₹27,425.75 crore.