PSU stake sales: Centre to take a call when market conditions improve

With the West Asia conflict leading to volatile markets and muted investor sentiments, the Centre is likely to keep all disinvestment issues on hold for the next few months, sources said, adding that the first quarter may not see any stake sales.
 
“Plans for stake sales in public sector units have been kept on hold for now as the extreme volatility in equity markets makes it difficult to time any issue. Investor sentiments have also been adversely impacted,” noted an official source, pointing out that typically the Centre tries to have at least a few stake sales in the first quarter of the fiscal year.
 
“We will review plans when there is more certainty and stability in the global geopolitical situation,” the source said, adding that there are several stake sales planned for the fiscal year, but they will take place as and when market conditions improve.   
 
Listings and stake sales in PSUs in sectors of energy and infrastructure were expected this fiscal, as well as an offer for sale of shares of Life Insurance Corporation of India. The Centre has also been working on stake sales in some public sector banks.
 
For FY27, the Centre has targeted raising Rs 80,000 crore from disinvestment and asset monetisation. With several relief measures being announced in the wake of the West Asia war, it is expected that the Exchequer will require higher revenue to bridge the additional expenditure.
 
In FY26, the total receipts from dividends from PSUs, disinvestment and asset monetisation amounted to Rs 1.23 lakh crore, which was the highest since FY19. Of this, PSU dividends contributed the lion’s share, amounting to Rs 78,438.07 crore, while receipts from disinvestment were Rs 16,885.56 crore.
 
The Centre’s big-ticket privatisation of IDBI Bank, which was expected to yield significant revenue, has also been shelved, and the government is reviewing whether it can be restarted with fresh bids called.

The privatisation of Shipping Corporation of India is also seen to be on hold, with more clarity emerging over the proposed transaction in a few weeks.For FY27, the Centre has targeted raising Rs 80,000 crore from disinvestment and asset monetisation.