The Indian government is fast-tracking stake sales in eight public sector firms, including LIC and Hindustan Zinc
A follow-on LIC issue may raise ₹100 billion, with another ₹50 billion from Hindustan Zinc
Weekly meetings with bankers are shaping pricing, timelines and a broader disinvestment pipeline amid volatile markets
LIC, Hindustan Zinc Among PSUs In Govt's Stake Sale Plan
Officials managing the disinvestment programme have been reportedly holding weekly discussions with investment bankers to assess investor demand, determine suitable pricing and finalise timelines for the planned offerings
LIC
Summary
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The Indian government is preparing to accelerate stake sales in several state-owned enterprises as it seeks to strengthen public finances amid pressure from elevated crude oil prices.
The Centre has identified eight public sector companies for potential share sales over the coming months. These include Life Insurance Corporation of India (LIC), Hindustan Zinc Ltd., and a number of state-owned banks, Bloomberg (BBG) reported citing people familiar with the matter.
A follow-on share sale in LIC could raise up to ₹100 billion (around $1.05 billion), while the government may generate an additional ₹50 billion through a stake sale in Hindustan Zinc, as per BBG.
The proposed offerings form part of a broader effort to improve fiscal flexibility as the government navigates the impact of higher energy costs.
Weekly Meetings Underway to Finalise Share Sale Plans
Officials managing the disinvestment programme have been reportedly holding weekly discussions with investment bankers to assess investor demand, determine suitable pricing and finalise timelines for the planned offerings.
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More bankers are also being appointed to prepare additional public sector companies for future stake sales.
The government is also reviewing the long-pending privatisation of IDBI Bank Ltd, the BBG report said. Authorities are considering lowering the reserve price and inviting fresh bids after the earlier attempt attracted limited buyer interest. However, the fresh bidding process is expected to remain restricted to participants from the previous round.
Investor Appetite May Face Fresh Test
The planned wave of public offerings comes at a time when foreign investors have withdrawn a net $29 billion from Indian equities during the first half of the year, contributing to an almost 9% decline in the benchmark Nifty 50 index, as per BBG.
Government-backed share sales may also compete for investor capital alongside large upcoming public offerings from Jio Platforms Ltd and the National Stock Exchange of India Ltd (NSE).
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Officials have reportedly drawn confidence from the strong response to recent stake sales in Coal India Ltd and NHPC Ltd, which encouraged the government to widen its disinvestment pipeline, the report said.
India raised nearly $2 billion through stake sales during the April-June quarter as part of its ₹800 billion asset monetisation target for the 2026-27 financial year. Bloomberg data showed that this amount has already exceeded the total proceeds from disinvestment recorded in each of the previous three financial years, it added.