DIPAM undertakes weekly capital review of PSUs to safeguard growth amid global uncertainty

Amid global uncertainty due to U.S. trade policy and geopolitical developments, the government is regularly reviewing the capital management of all public sector enterprises.

"We are undertaking a capital review of all PSUs on a weekly basis and working on strategies to insulate our economy from geopolitical risks," said Arunish Chawla, Secretary, Department of Investment and Public Asset Management (DIPAM).

Highlighting that PSUs account for 15% of market capitalisation, he said the focus is to ensure they continue meeting performance milestones and executing capex programmes to sustain economic growth momentum.

His comments come at a time when U.S. tariff policies have created significant uncertainty for the domestic economy. The government's emphasis on capital expenditure has been a key growth driver in recent years.

The DIPAM Secretary also said the government has appointed merchant bankers for possible stake sales in public financial institutions, including the Life Insurance Corporation of India.

"The appointment process has been completed. Merchant bankers have been appointed for three years, extendable to five," Chawla said.

However, transaction details for any potential stake sale are not available yet. "Individual transactions can happen anytime," he noted.

DIPAM had floated a request for proposal in February this year, inviting bids from merchant bankers to assist in stake sales of public sector banks and financial institutions.

A possible offer for sale of LIC may happen later this year, though the DIPAM Secretary declined to comment. The Centre currently holds a 96.5% stake in the life insurance giant, after selling 3.5% in May 2022.