In his first interview with Business Today since taking over as Secretary of the Department of Investment and Public Asset Management (DIPAM), Arunish Chawla outlines the government’s evolving strategy for public assets, the rational shift away from fixed disinvestment targets, and the department’s ambitious dividend outlook for FY26. Edited excerpts:
Currently market sentiments are volatile given global geopolitical tensions. Does this challenge DIPAM’s current strategy?
Market participants are very smart—they have already factored in the geopolitical problems. We adopt a composite strategy, supported by in-house research and guided by our DIPAM model. While developments may worry some, we look through them and far ahead.
So, are all of DIPAM’s actions aligned with market sentiment?
Yes, and beyond. It is the prime minister’s and finance minister’s vision to share the value of our public enterprises with common investors—senior citizens, even housewives are becoming investors. Our composite strategy monitors corporate performance, manages public stocks—which now account for 10–15% of the entire market cap. We want public enterprises to be role models of the stock market.
What is the DIPAM model?
It’s a policy model, not a market model, with four key pillars. It links corporate performance with dividend policy. It connects dividend policy to market prices. It helps us resolve the trade-off between what to sell and what to hold. It aids timing—ensuring we align our decisions with prevailing market conditions.
Does not having a disinvestment target help you focus more on value creation than revenue generation?
Absolutely. We don’t sell assets in distress. Whenever we disinvest or shut down enterprises, it’s part of a larger economic strategy—to create space for the private sector and enhance performance. It’s all part of a value creation approach.
Yet, the revenues from disinvestment have been low. Are you relying more on dividends now?
All three elements—disinvestment, asset management, and dividends—are important. We manage various sale mechanisms including OFS, IPOs, minority stake sales, etc. But dividend management is equally critical. We ensure public enterprises pay at least 30% of profits or 4% of net worth. Our research shows that on an average, public enterprises distribute 10% more dividends than Nifty50 companies.
That makes public sector stocks attractive. Do you see them as a hedge against market shocks?
Yes, if we hold good dividend-paying stocks, our income is hedged even if markets fall due to macro shocks. Public sector stocks are among the best hedges for investor portfolios.
You’ve often said private companies should share profits more fairly. Any plans to nudge them?
Only via moral suasion. We don’t plan any coercion. Research shows that 30–40% payout is a fair share of dividends. Dividends belong to investors; reserves belong to promoters. Our in-house research shows that public sector stocks statistically dominate Nifty50, and this is well-recognised by institutional investors and funds.
We believe private companies will align as expectations rise.
What big-ticket sales are in the pipeline for FY26?
We started the year with an OFS in April. Market conditions are improving, and we plan to come out with more OFS regularly in small tranches. This helps retail investors participate meaningfully, which is also the finance minister’s guidance.
OFS mechanism favor institutions over retailers? How are you addressing this?
Yes, institutional investors tend to move faster. This year, we’ll keep a green shoe option so that retail and small investors get a fair share. We’ll also provide forward guidance via DIPAM’s official channels.
What about the much-awaited LIC FPO?
We’ve already done 3.5% disinvestment in LIC. The government remains committed to increasing its market float. The work is ongoing, and you’ll hear good news soon. But as you know, no market participant shows all his cards—so, wait for the moment.
Let’s address the elephant in the room—loss-making PSUs. What’s the road map?
The new public sector policy identifies few strategic sectors where government presence is essential—like energy, transport, defense, critical minerals, etc. In other sectors, the private sector has come off age. Based on inter-ministerial reviews, certain public enterprises are being identified for closure, consolidation, or strategic disinvestment. All of this encourages greater private participation.
Given global uncertainties, could Budget numbers for disinvestment and dividends be revised upward?
We met our targets last financial year and have set higher ones for this year. We’re pushing public enterprises to improve performance and expect to achieve both higher dividends and asset sales this year.
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